Via INQUIRER.net 12/15/2009 MANILA, Philippines — The Philippines is one of the three East Asian countries (excepting China) that avoided a recession in 2009. The other two are Indonesia and Vietnam.
Registering a positive growth in GDP of at least 1.5 percent (it could been higher had it not been for the devastation caused by super typhoons), the Philippine economy has grown mostly due to private consumption expenditures and government pump priming. Exports dropped precipitously and investments were anemic.
The consumption-led growth, in turn, can be attributed to the more than P800 billion received by the relatives of the overseas Filipino workers whose remittances increased by more than 4 percent for the whole year against all odds. The Philippines would have surely gone into a recession if the OFW remittances had dropped by 6 percent or more, as forecasted by the World Bank and IMF at the beginning of this year.
Thanks to the superior quality of OFWs (the first to be hired and the last to be fired), remittances kept on increasing throughout the year. The only fly in the ointment is the strengthening of the peso at the end of the year, due mostly to the depreciation of the dollar. Many OFWs were expecting an exchange rate closer to P50 to $1 at the end of the year. They would be lucky to get P47.
Be that as it may, the purchasing power of the relatives of the OFWs is a formidable P800 billion or more. Since the government is already reaching its limit of deficit spending of 4 percent of GDP, the Philippine economy will have to be propelled by consumption spending for at least the first half of 2010 for the GDP growth target of 3 to 4 percent for the whole of next year to be attained.
That is why I reiterate my suggestion that OFWs and their relatives take an upbeat mood beyond the traditional Christmas period. I got a lot of feedback about my suggestion that at least for this year, Christmas be extended to at least to the middle of January to coincide with the Sto. Nino celebrations in cities like Cebu. Continue reading here http://globalnation.inquirer.net/columns/columns/view/20091215-242128/OFWs-Deliver-Again
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