The Department of Energy (DOE) has announced that during her two-day working visit to Japan December 11-12, President Gloria Macapagal-Arroyo would witness the signing of three loan agreements that would sped up the implementation of the Electric Power Industry Reform Act (EPIRA).

Energy Secretary Vicente Perez said that the three loans, totaling $208.5 million, will be signed with officials of the Japan Bank for International Cooperation (JBIC) on the second day of the President’s Tokyo visit.

The President will join the other nine leaders of the Association of Southeast Asian Nations (ASEAN) for the two-day ASEAN-Japan Commemorative Summit, marking the 30^th year of collaboration, mostly in economic and trade matters, between ASEAN and Japan.

According to Perez, one of the loan agreements to be signed is the $40 million loan from JBIC for the Wholesale Electricity Spot Market (WESM) operations.

A fact sheet released by the DOE said that under a deregulated environment, electricity would be traded electronically on an hourly basis and the WESM operation is likened to the stock market.

With WESM in place, consumers, particularly the big users, could choose their electricity supplier and market forces, under a liberalized environment, would now determine the price of electricity.

"This could eventually lead to lower power rates to end-consumers," the DOE said.

The second JBIC loan, amounting to $68.50 million, would be used to fund the installation of a 33-kilometer submarine cable from Talisay, Cebu to Tabangao, Leyte.

The DOE said that the project is intended to meet the growing power demand of Cebu by transmitting to the island province an additional 100 megawatts of cheap and environment-friendly geothermal power from the geothermal power plants in Leyte.

The project would eventually ensure the stability and reliability of power supply in Cebu, Negros and Panay.

The third loan agreement to be signed during the President’s working visit to Japan involves a total of $100 million, to finance the setting up of a 210 megawatt clean coal power plant in Misamis Oriental.

Construction of this big project would be completed within 36 months. Its target commercial operation would start in 2006.

Under President Gloria Macapagal- Arroyo, the Philippines has fortified its macro-economic fundamentals amid the continued downturn of the global economy.

The President’s political will enabled the country to buck the worldwide trend of a slowing down of economies brought about by the US-Iraq war, the SARS scare and the perennial threat of terrorism.

The continued strong showing of the country’s macro-economic fundamentals has smoothened economic wrinkles brought about by politically motivated attempts to destabilize the country.

Strong economic fundamentals put in place by the Macapagal-Arroyo administration enabled the country to tame the rise of both inflation and interest rates.

Monetary and fiscal performance

The three-percent average inflation rate from January to October 2003 was much lower than the projections of most economists, despite some negative upticks in oil and electricity prices. Interest rates have also been contained below the target for the year.

For the third quarter of this year, the country’s gross domestic product (GDP) grew by 4.4 percent and its gross national product (GNP) grew by 5.9 percent, a growth rate that even the government did not expect.

GDP is the value of goods and services produced inside the country, while the GNP is the total value of goods and services earned by the country overseas.

The GDP figure also exceeded the government’s forecast of 3.8 to 4.3 percent for the third quarter. This enabled the Philippines to outperform Taiwan, Indonesia, Singapore and South Korea in both GDP and GNP growths.

Likewise, combined investments, registered by the Board of Investment (BOI), the Department of Trade and Industry (DTI) from January to October 2003 reached P27.774 billion, 23 percent higher than last year’s P22.508 billion.

Local investments also registered an increase of 18.97 percent at P19.101 billion against last year’s P16.055 billion.

The surge in both local and foreign investments and the higher-than-expected growth rates shows that the both local and international business communities have continued confidence in President Macapagal-Arroyo’s administration.

Even the national government’s fiscal position through August 2003 improved as expenditure was contained in real terms. This is despite higher interest payments. Even the government’s revenue collections shot up by over 12 percent since August of this year due to sustained privatization efforts and an improved tax administration by the Bureau of Internal Revenue (BIR), the Bureau of Customs (BOC) and the Bureau of Treasury (BTr).

The government’s favorable fiscal scenario has allowed it to shy away from excessive loan assistance. Also, with the government’s increased absorptive capacity of the credits and grants of Official Development Assistance (ODA) funds and the improved monitoring of projects.

Agricultural modernization

Aside from prudent economic and fiscal management, the modernization of the country’s agricultural sector by the Macapagal-Arroyo administration has helped greatly in boosting the country’s overall economic performance.

The Macapagal-Arroyo administration has spent more than P20 billion annually for agriculture modernization. The highest allotted for the sector in the history of the Philippines.

With the government thrust in modernizing the sector, farmers who are beneficiaries of the government’s land reform program were able to transform their assets into credit and become economically independent from their former landlords.

Rice productivity has also reached new heights under the Macapagal- Arroyo administration. The yields of farmers were more than doubled with the propagation of hybrid rice.

More than 100,000 hectares are now planted with hybrid rice, which translated to a 20 percent growth in rice production.

President Macapagal-Arroyo said that her administration will maintain good macro economic management and institute reforms that will allow the country to withstand future economic disturbances and enable the most disadvantaged sectors to be more active in the country’s economic life.

President Gloria Macapagal-Arroyo maintained that she has remained consistent with her policies as she rejected allegations that she had a change of heart on certain issues.

"Let me reiterate; I am not fickle-minded," the President said in an interview on Saturday with television talk show host Boy Abunda.

The President made the clarification in the light of criticisms that she has shifted her stand on some issues, including the death penalty.

She said that she mistakenly believed that by announcing she was not interested in extending her tenure, her critics and detractors would stop attacking her, and the country would be able to move forward.

But after some months of quiet in the political landscape and the economy had improved, the attacks resumed, even accelerating to the level of destabilization," Mrs. Macapagal-Arroyo lamented.

She added that since she was still being dragged into the fight and the controversies, she decided she might as well join the forthcoming political exercise and use the knowledge and experience she mustered during her two and a half years at the presidency.

The President said she would not have changed her mind had her detractors left her alone and allowed her to do her job peacefully.