RP achieves modest growth; uncertain in ’92
These gains include the lowering of domestic interest rates, strengthening of the peso against the US dollar, and the weakening of the inflation rate, Mr. Estanislao said.
“The gains have been modest and we have not gone far enough except in the foreign exchange rate,” Mr. Estanislao stated, “so the choice before us is either to persevere in this track or get out of it for the temporary convenience of throwing economic caution out of the wind.”
“Perseverance is the call of responsibility,” he added, “that is why I would like to say this: economic stabilization has been achieved at such a high cost, it would be foolhardy for us to throw economic caution out to the wind after having invested too much in it.”
Among the gains cited by Mr. Estanislao were the decrease in domestic interest rates from 35% at the start of 1991 to 23% at the close of the year, low foreign exchange rate which is currently at P26.65 vs. $1.00, and lower level of inflation rate from 20% at the beginning to “just below 20% for three consecutive quarters.”
The costs of the stabilization of the Philippine economy were high, Estanislao said. This 1991, a 9% import levy had to be imposed to generate some P10-billion revenues for the Government and keep its fiscal house in order. Government spending had to be cut severely also, he added.
Without these measures, “unpopular as they are,” the Government would have been faced with more fiscal problems than it could handle, Mr. Estanislao said.
Besides, these measures had to be imposed because of the lack of new tax measures, the fiscal chief added.
CONFIDENCE
Mr. Estanislao expressed confidence that the Philippines will be able to face up to the challenge of the coming new year given the modest success it achieved this year.
Also, with the Government’s sticking to its stabilization program, the seal of good housekeeping from the International Monetary Fund ( IMF) will most likely be obtained by the last two weeks of February 1992 as soon as the Senate passes the new tax measures.
The IMF report is expected to be issued by January 25 for approval by its Board either on the third or fourth week of February, Mr. Estanislao said.