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Government creates another 'stimulus' plan Economy

By Cai U. Ordinario/ Reporter
Thursday, 13 August 2009 21:36
THE national government is creating another “stimulus” plan in the form of the Reloading Economic Acceleration Plan (REAP) for 2010 and beyond, according to the National Economic and Development Authority (Neda).

In a presentation, outgoing Neda Director General and Socioeconomic Planning Secretary Ralph Recto said the new “stimulus” should be alloted for improving competitiveness and developing new industries to create more job opportunities.

Recto also said it is important for the REAP to renew the government’s commitment to solving the country’s infrastructure backlog and promote the use of clean energy, green architecture, nonvoice outsourcing and other pioneering fields. “It’s hard to say when the 7 percent will happen [again] but we have to develop new growth drivers like green technology. I believe we need more blue skies in Metro Manila, its all part of achieving sustainable development,” Recto said.

The outgoing Neda director general said he also left several recommendations for the government to pursue under the REAP, like preparing for water-scarcity scenarios in the short and long term, popularizing low-cost desktop computers among public high-school teachers and students, and seriously investing in green industries.

Recto also said there is a need to strengthen and attract Chinese investments and take advantage of their exit strategy from the global financial crisis.

Neda Deputy Director General for Investment Programming Rolando Tungpalan said in the recent trip of Recto to China with him and several other top Neda officials, Recto wanted the country to take advantage of the $10-billion-worth infrastructure fund of the Chinese government.

Tungpalan said the $10-billion fund will be distributed as concessional loans, which could be beneficial to the country especially considering the infrastructure backlog nationwide.

The only problem, Tungpalan said, was the issue surrounding the national broadband network-ZTE Co. (NBN-ZTE) deal which was canceled due to alleged corruption. This, unfortunately, has been the biggest threat to the country’s ability to attract more Chinese investments and loans.

In fact, the proposed five-year framework of the Philippines with China has been put on hold for the longest time because of the NBN-ZTE fiasco. The framework is still with the Department of Foreign Affairs. “The NBN-ZTE made China very conscious in investing with us,” Tungpalan said.

Ruben Reinoso, Neda assistant director general for Infrastructure, Regulation and Contract Review Services, said China has $200 trillion to $300 trillion lodged in banks which can be used for more consumption.

If the Philippines wants to achieve higher growth or growth at par with the 2007 growth of 7.2 percent, the country must strengthen its ties with China to take advantage of the expected increase in consumption. In fact, because of the amount of liquidity of China, Reinoso said China can replace Japan as the country’s biggest source of official development assistance loans. As of press time, Recto said the economic managers have not yet decided on an official figure for the REAP.

However, the World Bank already expressed its willingness to take part in the REAP by providing any form of support that would contribute to the success of the program.

World Bank Philippines country director Bert Hofman said the Washington-based multilateral institution’s Country Assistance Strategy is “quite flexible” and can accommodate any funding requests the government may have to finance another stimulus package.

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