How the Philippine Embassy manipulates the news to create a nice image…  

Below is a press release from the Phil. Embassy that the economy is doing ok per the NY Times.  Below this, I have put the actual op/ed piece.  The Phil. Embassy selects only the favorable parts and prop it up as the whole article.

Essentially the actual article ends by saying the Philippines needs national industrialization and not OFWs and call centers.  Yet the Embassy selects certain quotes to make it sound like the opposite. 

Philippine Embassy
News Release
12 May 2009

RP is ok thus far, says New York Times

The Philippines, which lagged behind its more economically progressive
neighbors in Asia in previous years, is now outperforming most of its East
and Southeast Asian neighbors, and will continue to make headway at least
for a couple more years.

This assessment appeared in the New York Times which cited the Philippines
for its improved economic management amid the global crisis.

The article, written by Philip Bowring, said the Philippines’ expects a
gross domestic product (GDP) growth of 2 to 3 percent this year—a rate
superior to its East Asian peers except China and Vietnam, and a sharp
contrast to the negative growths elsewhere.

The Philippines registered an average growth rate of 4.5 percent in the
past seven years.

The New York Times said the relatively strong performance this year of the
Philippines will be due to its biggest long-term weakness—reliance on
overseas workers’ remittances which account for 10 percent of GDP and the
bulk of its foreign exchange earnings.

Though remittances of overseas Filipino workers (OFWs) are expected to
weaken from $16 billion in 2008, the remittances have held up well thus far.

A second bright spot—in contrast with the woes of the Asian electronics
manufacturing sectors — is in call centers and business process outsourcing
(BPO) which should keep growing, albeit more slowly, it said.

Business outsourcing absorbs some educated labor but does little for the
unskilled, the NYT article said.

Another boost will come from government spending in badly needed
infrastructure, health and education which have been made possible by
stabilizing fiscal position over several years that brought interest rates
and the cost of debt servicing down, it added.

Even agriculture, long a drag on the economy, has been achieving steady
growth of 3 percent a year with increased investment and higher prices, the
NYT reported.

In his article, Bowring said the bottomline in the Philippines’ good
economic performance is that it did not depend on export manufacturing,
which, however, was also a weakness in that the country failed to use its
abundant labor force.

Industry accounted for only 33 percent of output and has been declining for
three decades. Philippine infrastructure is poor because of low budget
revenues and the dominance of a few big groups in its commercial life has
become a disincentive, the NYT report said.

It said that Philippine labor will continue to be sought
overseas—particularly in East Asia, which is aging fast. The country may be
able to build on gains in fiscal stability and balance of payments
equilibrium.

Remittances will remain less vulnerable than manufactured exports to global
developments, it said.

Reference:
Consul Gines Gallaga
Press and Information Officer
Email: ggallaga@cox.net
Tel
: 202-467-9432

 ————————–

http://www.nytimes.com/2009/05/05/opinion/05iht-edbowring.html?_r=1

MANILA — “So the last will be first…”

It may be premature, but the Philippine economy looks as though it may outperform most of its East and Southeast Asian neighbors, at least for a couple of years. That says something about improvements in economic management, and much more about the different ways in which countries are being affected by the global crisis.

The Philippines expects GDP to grow by 2 to 3 percent this year, a rate superior to anything in East Asia other than China and Vietnam, and a sharp contrast to the negative numbers elsewhere.

This would follow seven years of an average of 4.5 percent growth. That may not sound like much to boast about, particularly in a country with a population increasing by 2 percent a year, but it’s high by local standards and the most sustained improvement since the mid-1970s.

So has the Philippines really turned a corner?

The relatively strong performance this year will be largely due to what is also the Philippines’ biggest long-term weakness — reliance on overseas worker remittances, which account for 10 percent of GDP and the bulk of foreign exchange earnings.

Although these are now expected to fall from the $16 billion that Philippines abroad sent home in 2008, such remittances have held up well thus far.

A second bright spot — in contrast with the woes of Asian electronics manufacturing — can be found in call centers and business process outsourcing, which should keep growing, albeit more slowly.

Another boost will come from government spending. The success that the Arroyo government has had in stabilizing the fiscal position over several years has allowed interest rates to come down, reducing the cost of debt service and making room for money to be spent on badly needed infrastructure, health and education.

Even agriculture, long a drag on the economy, has been achieving steady growth of 3 percent a year thanks to increased investment and higher prices.

The bottom line in all this is that the Philippines is doing relatively well because of its lack of dependence on export manufacturing. But therein also lies it greatest weakness — the failure to make use, at home, of its abundant labor force.

Industry accounts for only 33 percent of output and has been in decline for three decades. Physical infrastructure is poor mainly because of low budget revenues. Governance issues and the dominance of a few big groups in commercial life are further disincentives.

Remittances have become a crutch which sustain consumption but do little for investment, other than in housing, and are unevenly distributed. Business outsourcing absorbs some educated labor but does little for the unskilled.

Despite several years of positive GDP growth, according to one survey the poverty level actually rose between 2003 and 2006. Inequality has certainly risen.

Of course, there is nothing in principle to stop the country continuing on today’s path for several years once the global economy has overcome its current difficulties.

Philippine labor will continue to be sought overseas — particularly in an East Asia, which is aging fast. The country may be able to build on gains in fiscal stability and balance-of-payments equilibrium. Remittances will remain less vulnerable than manufactured exports to global developments.

Yet without a much broader industrial base, without much bigger commitments to long term investments, public and private, and better governance, it is hard to see the Philippines breaking out of a 40-year pattern of relative decline.

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