Europe Crisis Impact on Philippine Economy

The country’s economic managers are watching the developments overseas particularly in Europe and the US because of its possible impact on the Philippine economy in the second half of the year, a Palace official said on Thursday.

The Philippines continues to diversify its exports to different countries and carries out other measures having in mind that uncertainty in those regions could make local conditions difficult to handle, Secretary Ramon Carandang of the Presidential Communications Development and Strategic Planning Office said in a press conference in Malacanang on Thursday.

The question whether Greece stays in the Euro, or whether the Republicans and the Democrats in the US come to terms in some kind of budget deal are the things that the economic cluster is watching out for possible risks to the country’s gross domestic product, he noted.

“That will have an impact on us. It will have an impact on remittances, possibly, and on exports,” Carandang said.

But mentioning figures from Economic Planning Secretary Arsenio Balisacan, Carandang said that actually the Philippines’s capital formation or investments increased by about two percent in the second quarter—2.3 percent. During the same period last year, it was down by 10.1 percent, he said.

“Arsi (Balisacan) says that he believes that this is a trend that has begun, that capital formation has bottomed out and that we’re going to see new investments and new capital formations, contributing increasingly to economic growth as we move forward. So hopefully that will, to some extent, offset some of the uncertainty that we’re facing in Europe and North America,” he added.

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