World watchful on martial law, GMA House bid — NY think tank

12/10/2009





Original Story: http://www.tribune.net.ph/headlines/20091210hed5.html


A New York-based think tank said recent moves of President Arroyo to seek a congressional post next year and her declaration of martial law on Maguindanao are being closely watched by the global business community.

Global Source added the record-setting budget deficit this year that will require increased borrowings is expected to trigger credit downgrades that would increase the cost of loans by both the government and the private sector.

In its latest report on the country called “Never Can Say Goodbye” Global Source said while Arroyo’s decision to seek a lower elective position in next year’s elections was expected, the market was still stunned when she actually filed her candidacy on Dec. 4.

It noted in its Dec. 8 paper on the Philippines that Arroyo’s decision to seek a lower elective position has worried local and overseas business groups.

The report said the decision was not so much a bid to extend her desire to engage in public service as it was a run for legal cover.

“Of course, a seat in Congress would not automatically save Arroyo from criminal suits once she steps down from the presidency by end-June 2010. It does not provide her the immunity she needs as the office can only shield her from charges of libel and minor offenses,” the report said.

It also urged “close monitoring of

events and of the complex forces behind the developments” on Arroyo’s imposition of martial law in Maguindanao province.

“History has shown how military rule can be exploited if so designed,” it said.

“While the general public has been quite accepting of martial law proclamation in Maguindanao, the business sector has been less forbearing,” it added.

Global Source noted that among those that have expressed strong reservations about Arroyo’s “drastic move” to quell violence in the province through military rule include representatives of some foreign chambers of commerce, the Management Association of the Philippines, and the Makati Business Club, which it described as a group that includes a number of the country’s influential businessmen.

The report also expected some form of market “punishment,” like a credit downgrade, on the country for breaching its deficit goal.

The other day, Department of Finance
(DoF) officials have ceded that the likely fiscal shortfall by the end of the year will breach P300 billion to at most P320 billion due to the difficulty that the government is encountering in the sale of its assets.

The biggest fiscal gap ever for the country thus far for a year was P214 billion that was incurred in 2002 during the second year of Arroyo’s presidency after overthrowing popularly elected president Joseph Estrada in 2001.

“There has been relative calm in the markets despite fiscal slippage partly owing to a robust current account, which has permitted a healthy amount of dollar borrowing while keeping liquidity conditions loose,” the think tank said.


Original Story: http://www.tribune.net.ph/headlines/20091210hed5.html