Once again, the Philippine economy proved its tenacity as it grew strongly amidst grave geopolitical tensions in the first quarter of the year. GNP growth at 5.6 percent exceeded the government’s official forecast (4.3-4.8%) while GDP growth hit the high end of the forecast (4.0-4.5%).

Domestic demand provided the much-needed linchpin for our economic growth in the first quarter. Private consumption rose at its fastest pace since 1998, abetted by low inflation and the growing variety of consumer goods brought about by our policy of liberalizing retail trade. Investments staged its first double-digit growth since 1997, although much of this is due to the stockpiling of oil. Private construction likewise accelerated to its most robust pace since 1997, boosted by policies easing housing finance. However, public construction was stymied anew by our policy stance to arrest further expansion of the fiscal deficit.

Growth continued to be broad-based, indicating the fundamental soundness of the Administration’s policies to lift as many sectors as possible. We are encouraged by the marked ability of the agricultural sector to withstand the cyclical drought, evidenced by the growth of seven of the nine agricultural sub-sectors during the quarter. Industry continued to reap as well from programs supportive of mining, housing and SMEs. We are pleased to note that domestic oriented-firms provided much of the growth in manufacturing against the backdrop of slowing exports growth. In services, growth has become more diffused as a modest slowdown in communication was balanced by more upbeat growth in finance, mainly insurance; ownership of dwellings and real estate; and private services.

Socioeconomic Planning Secretary Romulo Neri today vowed to continue pursuing policies "that have worked well for the economy," particularly those that would generate jobs, raise productivity and ensure macroeconomic stability.

In a statement, Neri disclosed better-than-expected gross national product (GNP) growth figures and a gross domestic product (GDP) growth rate that hit the high end of forecasts for the first quarter of 2003.

He said the GNP grew at 5.6 percent, exceeding the official forecast of 4.3-4.8 percent while GDP grew at 4.5 percent.

The GDP is the value of goods and services produced in the country at a given time. The GNP is GDP plus income from abroad.

"Once again, the Philippine economy proved its tenacity as it grew strongly amidst grave geopolitical tensions in the first quarter of the year," Neri said.

He attributed the growth to domestic demand.

"Private consumption rose at its fastest pace since 1998, abetted by low inflation and the growing variety of consumer goods brought about by our policy of liberalizing trade," he added.

Neri disclosed that investments grew to double digits since 1997, "although much of this is due to the stockpiling of oil."

Also on the uptrend since 1997 was private construction, boosted by policies easing housing finance, he said.

Neri stressed that growth remained broad-based, showing the fundamental soundness of policies the administration of President Gloria Macapagal-Arroyo had adopted to uplift the condition of as many sectors as possible.

Among the other sectors that gave the economy a big lift were the agricultural sector that withstood the cyclical drought; industrial sector particularly in mining, housing and small and medium enterprises; manufacturing sector that persisted even against the backdrop of an export slowdown; and the services sector that was upbeat in finance, real estate and home ownership, and private services.

"The growth performance in the first quarter bode well for the economy’s outlook for the whole year: 4.5-5.4 percent for GNP and 4.2-5.2 percent for GDP," Neri said.

However, despite the strong growth figures for the first quarter, Neri noted that growth figures for the rest of the year would depend on how the global economy would perform.

"The signs are not very good for Japan, Europe and the US. The weakening of the dollar does not bode well for Europe and Japan. This might affect their economies adversely which in turn will affect our export performance," he said.

To counter the scenario, he said government has put in place various reforms to strengthen the domestic economy.

"We would like to be less dependent on exports for our growth and employment and look for domestic sources of growth and employment particularly in agriculture, small- micro- and medium enterprises (SMME) and housing construction," he added.

The Department of Agriculture, for instance, has set up programs to increase agricultural productivity while the Department of Trade and Industry is focusing on lending programs for SMMEs worth P20 billion.

Another source of growth for the country is the role of Clark and Subic as logistic centers that are expected to improve the supply chain.

"We hope to jumpstart this with the modernization of the airport facilities which would increase the number of landings and shipments for cargo/logistic purposes," Neri said.

He also hoped that the private sector would pick up loans available for the roll-on roll-off (RORO) ports and shipping modernization.

"Businessmen are happy with the RORO ports and vessels as it has reduced the cost of doing business particularly in cargo handing, inventory and tourism," Neri said.

URDANETA, Pangasinan – President Gloria Macapagal-Arroyo today disclosed the availability of P15 million to initially build a new public market here, as she also announced that the Department of Agriculture (DA) would disperse some 3 million bangus fry to replace those hit by heavy rains spawned by typhoon Chedeng.

The President visited this town to assess the damage and the needed help of the people of Pangasinan affected by the typhoon.

When she learned that the Urdaneta Public Market was recently gutted down by fire, she said some P5 million would be provided by Congressman Mark Cojuangco, P5 million by the City of Urdaneta and P5 million by the national government for its initial construction.

She added that Agriculture Secretary Luis Lorenzo had assessed that floods had damaged some 6 million bangus fry in fishponds.

Besides replacing the bangus fry, the DA would also disperse 250,000 tilapia fry and 315 bags of certified rice seeds, she said.

She further announced that the National Food Authority (NFA) has allocated 200 sacks of rice for each Pangasinan congressional district.

The President branded as false a radio announcement that the flooding in Pangasinan was caused by the opening of the Binga Dam.

"I checked and I am announcing to you that this is not true," she said in Ilocano. She added that the Binga Dam was not opened and is not going to be opened.

The Binga Dam-San Roque Dam, combined, could capture the water coming from the mountains, she said, stressing that flooding in the Agno River remained "a thing of the past."

The flooding in Urdaneta, Dagupan, Calasiao, Sta. Barbara was the result of the heavy rains brought about by Typhoon Chedeng.

The President thanked the people for a warm welcome accorded her during the visit. Urdaneta is adjacent to the President’s hometown, Binalonan.

ZAMBOANGA CITY – Caught in the crossfire of an armed conflict initiated by armed men embracing terrorism as a way of achieving their goals, eight-year-old Jairullah (not his real name) is now beginning to realize there is another side to life other than guns and bombs.

Jairullah is but one of several children in Sirawai, Zamboanga del Norte now undergoing therapy sessions from government workers in a day-care center of the town’s poblacion, playing like ordinary children and unmindful in the horrors of war.

He goes about the routines of childhood in an environment detached from the things going on around him. In the day-care center, he is now a victim but an ordinary kid out to enjoy life with his colleagues.

"Masaya man dito. Enjoy kami," says Jairullah, before running back to his playmates.

Day-care workers trained by field personnel of the Department of Social Welfare and Development (DSWD) make sure Jairullah and his ilk, whose families have evacuated and are now residing with their relatives, are gathered everyday for therapy sessions.

This psycho-social intervention through "play therapy’ using ECD (Early Childhood Development) materials has been ordered by DSWD Secretary Dinky Doliman in areas affected by the government’s punitive military operations against the selected lairs of the Moro Islamic Liberation Front (MILF) rebels who have been blamed for several terrorist acts in Mindanao.

"Psycho-social intervention is one way of helping the children get rid of the traumatic effects of war, which, if left unattended, would linger in the young minds and hearts of the innocent children long after the war or critical incident is over," says DSWD Regional Information Officer Fe de la Cruz.

It is not only children though who get ample help from the government in its goal of intensifying humanitarian assistance to the victims of the Mindanao conflict.

Earlier, the staff of the DSWD Region IX as well as some NGO volunteers from Ateneo de Zamboanga, conducted stress debriefing sessions to affected individuals and families in Siocon, Zambonga del Norte.

Meanwhile, in response to the immediate needs of the family-evacuees for food commodities, the DSWD Central Office has released an additional augmentation assistance of P1 million to the DSWD Field Office X for purchase of relief goods for the evacuees’ two-week consumption.

The DSWD-FO X is continuously coordinating with its local counterparts and will be sending more personnel to the area to assist in the relief operation.

President Gloria Macapagal-Arroyo today vowed to further pursue reforms in the power sector to ensure that industries and communities would get cheap but reliable electricity to subsequently spur their productivity.

But the President said that there is a need for privatization to source the huge capital needed to boost the power sector.

The President said the government "will minimize bottlenecks to productivity such as the high cost of power," bringing to the fore the implementation of the Electric Power Industry Reform Act of 2002.

In a speech during the ceremonial inauguration of the San Roque Multi-Purpose Project (SRMP) in Malacaņang, she disclosed that the Philippines needed another 6,000 megawatts (MW) in the next ten years to avoid shortages.

"It takes three years lead time from planning to construction to operation in order to establish a power plant. Thus, we need to act now," she stressed.

Studies showed that some P4 billion is needed to bankroll the needed power plants and to support transmission and distribution facilities.

The President said the companies historically handling these power-related assets, however, are beset with financial problems.

She said the National Power Corporation generates power, the Transmission Company transmits power while the Manila Electric Company distributes power.

She said "the answer to sourcing the huge capital requirements of our power sector is privatization."

The President cited the completion of the $1.2-billion SRMP, which she said "is indeed an example of the kind of investment we need in the power sector."

She lauded major SRMP investors Sithe Philippines Holdings, Inc., Marubeni Corporation, and KPIC Singapore Pte Ltd. of Kansai that "assumed the risk of financing, securing regulatory approvals, designing, building and operating the project" with financing from the Japan Bank for International Cooperation,

The investors, she said, have "placed the power portion and the flood portion in commercial service way ahead of time."

The SRMP will operate primarily as a peaking plant to cover domestic demand unfulfilled by output from other plants.

The SRMP would "reduce our dependence on imported fuel … lower expenses of other plants," she said, adding that savings derived would "translate into lower power costs to our people and industries."

The President also disclosed conservative annual energy demand growths in Luzon, the Visayas and Mindanao.

She said Luzon would need an additional demand of 1,600 MW from 2003 to 2006; the Visayas would need 240 MW more; while Mindanao would have to be provided with 260 MW more.

"We need to have privatization," she added.

The President noted that the key to privatization is to create an investment climate attractive to domestic and foreign investors and to create a transparent and corruption-free privatization process.

But she noted that a power crisis looms in the Visayas, which might experience power shortages by December this year.

"We must start giving particular attention to Panay, an island with no indigenous energy and farthest from the geothermal steam fields of Leyte," she said.

The power demand for Panay, which has a current capacity of only 138 MW, might rise to 220 MW from its current demand of 190 MW.

The imbalance is being managed "because it imports power from Negros … a palliative measure," she added.

The President said there is a solution to the problem – the establishment of the Mambucal geothermal plant, the expansion of the Palinpinon plant and the commissioning of the Negros geothermal projects by 2004.