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industrial sector was largely affected by the 15% contraction in construction activities in the third quarter.

Experts said many of the construction firms have huge dollardenominated loans which were affected by the currency depreciation, while the high interest rates on housing loans caused a drop in real estate demand.

NEDA’s Mr. Medalla said the construction industry was mainly supported by government-funded projects. NEDA data show that as of the first semester, government-funded construction grew by 12.4% compared to a 6.6% contraction in private construction.

The increase in publicly funded construction activities, said Mr. Medalla, was a result of pumppriming efforts to temporarily offset unemployment. But critics said this is not enough to stem the rising unemployment rate.

Trade Union Congress of the Philippines secretary-general Cedric Bagtas said while small firms have slowed down in retrenching workers, the big companies have notable laid off workers at a more frequent rate.

Although the government has reported a decrease in the number of strikes, “when you compute, there are more man- hours lost due to the prolonged strikes that are occurring,” Mr. Bagtas said.

Mr. Villegas, meanwhile, said the peso’s depreciation, high interest rates and increased competition will exert pressure on most industrial firms. “To the benefit of consumers, however, competition is reining in the prices of most consumer-oriented goods.”

NSCB figures show that as of the third quarter of 1998, basic commodities like food, wearing apparel and household posted an average growth of 2% growth.

Mr. Villegas said hardest hit by the crisis were those engaged in the trading and manufacturing of intermediate and capital goods.

With import dependent sectors such as rubber, chemicals, petroleum and metals posting significant declines during the third quarter, Mr. Villegas said recovery in these sectors will take at least one year.

Of great interest that would likely be monitored by the majority of those who voted him into off ice is President Estrada’s propoor program.

The Philippine Institute of Development Studies (PIDS) said while poverty incidence declined between 1985 and 1994, the number of poor families actually increased.

With the country’s population growing annually by at least 2%, the number of poor families as of 1997 was at 4.55 million, an increase of about 20,000 from the 1994 figure.

“Compared to other countries, we have not succeeded as much in eliminating poverty,” PIDS research fellow Josef Yap said in a report.

This observation was supported by the United Nations Development Programme (UNDP) when it released its poverty report last October. The UN body said the country has been relatively unsuccessful in reducing poverty in the last 20 years compared to its Southeast Asian neighbors.

The UNDP report said the financial crisis has had a “pronounced” effect on poverty, turning it into a “human crisis.”

A factor which caused poverty to drop in neighboring countries was the growth in their economies, coupled by increased employment in labor-intensive export industries and in agriculture, the report said.

Mr. Estrada’s pro- poor program was highlighted by the creation of the National Anti-Poverty Commission (NAPC) last July.

NAPC secretary- general Orlando Sacay said while it is true that economic growth is the best way to reduce poverty, the government should focus efforts at reducing inequitable distribution of income. “Nowhere else in the world is the income distribution more skewed than here in the Philippines.”

Mr. Sacay said while poverty incidence dropped to 32.1% in 1997 from 35.5% in 1994, the income gap still widened, with the richest 10% of the population now 24 times richer compared with the poorest 10%... the richest 10% then had income levels 19 times larger than the poorest 10% of the population.

If income inequity needs to be addressed, Mr. Sacay said the government will have to address the breaking down of monopolies and establish a more eff icient tax collection program.

The task for the Estrada administration this year goes beyond surviving the crisis.

The goal is to ensure that all gains should be sustained by all sectors that have major contributions to the overall economic growth.

And Mr. Estrada can start proving his critics wrong in a country wanting a turnaround for the better at the turn of the century.