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‘China effect’ seen giving boost to PH manufacturing, exports

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Philippine economic managers are closely watching developments in China and Europe, having identified opportunities and risks for the country as changes sweep across the two economic giants, National Economic and Development Authority officials said in separate interviews.

As China and the rest of Asia grows while Western economies struggle, the Philippines will have to weather the shocks and seize opportunities by improving competitiveness, Socioeconomic Planning Secretary and Neda Director-General Cayetano W. Paderanga Jr. said in an interview.

The “China effect” alone could add an annual average of 0.5 percentage point to the Philippines’ gross domestic product (GDP) until 2016, Neda assistant director-general Ruperto P. Majuca told reporters.

While there is a small risk of China slowing down and possibly having a “hard landing,” Majuca said it seems less of a danger than worsening turbulence in Europe.

The euro zone debt crisis is seen to continue in 2012 and send shockwaves to Asia, according to economists.

This, Majuca said, could clip growth in the Philippine economy (in terms of GDP) by around 0.8 percentage point in 2012.

In any case, Majuca said, “These are the two external things being watched.”

Private economists agreed China’s plan to shift from being the factory to the world to a more consumer-based economy could be a plus for Philippine exporters, provided they prepare early and quickly seize export opportunities.

“China’s rising production costs due to labor pressures bodes well for our manufacturing sector, as its status as factory to the world is now being compromised. I think the surging growth in our manufacturing sector can be partly attributed to this key trend,” Dr. Cielito F. Habito said in a text message.

Some sectors that will benefit are food manufacturing, consumer durable products and agriculture, said Dr. Cid L. Terosa of the University of Asia and the Pacific.

“Yes, I agree that it would add 0.25 to 0.5 percentage point to GDP on average. It looks promising because China is a huge consumer market,” Terosa said.

To shield the economy from possible ill effects of changes in China and Europe, the government wants to fund projects with immediate benefits to the poor as well as those that would improve competitiveness among local businesses, such as infrastructure, Paderanga told reporters.

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Tags: China effect , Exports , National Economic and Development Authority , Philippine manufacturing , Socioeconomic Planning Secretary and Neda Director-General Cayetano W. Paderanga Jr.

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  • Fred Santos

    That’s the biggest problem in Philippine Government, most officials are in for easy money and thinking only of their own pockets. They do not care about the people who placed them in position. They will promise the moon and stars before election and when they are elected they forget all those promises and only think of how to make money to gain power and stability. I think it’s because of their limited terms, they do not care for reelection so they have to make the most out of it while in office. In the case of the president who has only 6 years without reelection, he will be doing good on the first 2 years, but on the 3rd to the 6th, he has to think of his retirement, so he will raise as much money as he can rightfully or otherwise. Money is power in the Philippines and money can buy anything in the Philippines especially allegiance, justice, and FREE pass from jail. Look what’s happening now, the past administration who made so much money by all means are now being hunted down by the present, wasting time to make plans and improvement for the economy and the people. It happened also with GMA and Erap in the first 2 years, then what did GMA do on the 3rd to the 9th year? History will repeat itself over and over with this kind of government. The victim of which will always be the people.
    If they will be entitled to reelection for as long as the people wants them, they may be able to think of the other people’s welfare at least a bit. Just like in other countries where there are succession of power or reelection for as long as the people want them, they at least thought of how to improve the lives of their countrymen. We have seen it in Singapore, in North Korea, in Great Britain, in Japan, and in China. All of them became successful in the long run, because the leaders want to stay in power as much as they can so they take care of their people at least. But in the Philippines, new management, new rules, new leader every 6 years, and always too short to make a long range plan. Every new leader has a set of agenda, new techniques, new people, new style of governance, and it is being repeated every 6 years that all plans never had a chance to take off due to it’s short time.
     
    Yes, they have tried it during Marcos time that lasted for 20 years, but accept it or not,
    the economy of the Philippines at that time is much better than today, and people are more disciplined and behave. What the economy of the Philippines have now, are the huge dollar remittances of our OFW’s. The only problem then is the greediness of the family to acquire all the wealth they can lay their hands on. But again, if there will be an honest election and I mean HONEST, and no limit for their terms, I think all the plans, long range and short range will boost the economy and livelihood of all Filipinos.
    The country need a short and long range plan to industrialize or revolutionize the business sector. Export of all product is the key, not export of our good working and professional people. And that need, modern machineries, equipments, and technologies available and affordable with the least capital involved for every Filipino to avail of.

    in reply to marithe francois

  • http://pulse.yahoo.com/_VKJ2VQO3R6XTR4DFNWY6WOFLXE Pixel

    ang problema kasi ayaw mag-invest ng Gobyerno sa mga proyektong may magandang return of investments puro na lang patapon na proyekto. 

  • http://joboni96.myopenid.com/ joboni96

    tatamaan tayo
    if our ofws get laid off

    europe and u.s. down
    tsina will go down, slight chaos

    better worldwide environment
    with less pollution from production

    solutions:
    1. import substitution geared to future massive exports
    2. government bonds direct sell to ofws for growth projects
    3. new trading partners – high growth countries
    4. metals not ores exports
    5. tourism with no. 3

  • Fred Santos

    This could be a good time to make modern machines and equipments for manufacturing be available and affordable to the Filipinos. Small and large businessman should avail of these machineries at the lowest possible cost withot taxes and tarrif duties to be affordable. It should also be available thru loans with minimal interests so more people can produce all kinds of items, products, that would be competitive in quality and prices consistently by the use of these modern machines and equipments, so it can be exported abroad after satisfying the local needs.
    Modern Farm machineries and implements are needed to improve food production, so it needs to be included for availability and affordability secured by Government loans to local farmers.
    There are so many modern machines in China, Taiwan, Japan, Korea and even India that could be brought in free from taxes and duties that can mass produce products to bring down prices
    with competitive quality. It’s time to highly industrialize the country to improve its economy and uplift the living conditions of the Filipino people.
    Modern machines like one that I saw in China that is fully automated to make 25,000 pcs. of Hollow Blocks in 8 hours, Packaging machines and Printing machines so the country doesn’t have to import packages abroad. Even machines that can produce nails, rivets, staple wires, needles that are so small, it can be placed in a small room. There are plenty of machines that can be very useful for any products to produce with quality, consistently and lower prices that would be good for small and large businesses. Industrialization is the key to Philippines success
    not exporting domestic helpers, and care givers.

    • marithe francois

      i completely agree regarding machineries, but, agencies like TESDA have refused to accept trainings that entail higher budgets because it will reduce their savings which could mean lower personnel allowances. we did that with virgin oil production, we had the machine, pero bawal daw ang vco. after submitting five proposals to the TESDA, they won’t support us. somebody from the inside told us, bababa ang savings, so di yan papayag. at the end of the year, they divide the bounty. what a way! Isn’t it malversation of funds? just asking. 



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