MANILA - PHILIPPINE President Gloria Macapagal Arroyo said on Friday her government will spend more to stimulate the economy and protect growth as the world braces for the worst financial turmoil in 80 years.
A shift in the concentration of the country's exports to China from the United States would help minimise the impact of the crisis that originated from the US mortgage market a year ago, Mrs Arroyo said.
'The US is having an economic slowdown,' Mrs Arroyo told a business forum. 'We hope it will not have a recession, that's why we have drawn up our contingency plans to maintain our growth.'
'Part of that is we have to pump prime, we have to spend, and to finance the spending ... we have to increase revenues.'
Mrs Arroyo said the government would pursue plans to sell state assets to raise cash and fund infrastructure spending.
Manila has said it wants to sell its 40 per cent stake, valued at about 25.7 billion pesos (S$802.32 million), in oil refiner Petron and a portion of its stake in oil and gas explorer PNOC-Exploration Corp this year.
'Privatising our economy is a top priority,' Mrs Arroyo said.
'We want to reap the rewards of our investments and use these rewards ... to invest in the people.'
Bank bailouts, liquidity injections and interest rate cuts across the world have failed to quell investor anxiety over a possible global recession.
Markets worldwide remained on a downward spiral, with the Philippines' main stock index plunging 8.3 per cent on Friday, its biggest single-day drop in 11 years.
'The best buffer we have to external vulnerability is our own domestic internal strength,' Mrs Arroyo said.
Fiscal reforms such as a higher sales tax and banking reforms imposed by the government after the 1997/98 Asian financial crisis would help the Philippines withstand the global financial storm, she said.
Manila is also less dependent on exports to the US than about 10 years ago, with China and Hong Kong combined now the Philippines' biggest export market.
Rising trade within Southeast Asia would also cushion the fall in demand from the West, Mrs Arroyo said.
In Aug, Philippine shipments to China and Hong Kong reached US$976 million (S$1.44 billion), almost 50 per cent higher than exports to the US of US$652.77 million, data released by the statistics office on Friday showed.
The US has traditionally been the Philippines' biggest export market. -- THOMAS REUTERS
