Arroyo told to review economic policies amid worsening inflation

MANILA, Philippines - An opposition senator on Sunday urged the Arroyo administration to review its economic policies in the light of the surging inflation that has left majority of Filipinos scrimping to survive. Senator Loren Legarda said this is in line with the prediction of the Bangko Sentral ng Pilipinas’ (BSP) that the inflation could persist until the first quarter of 2009. In a statement, Legarda said that if left unchecked, the current economic situation could lead to a “massive slump" similar to the financial crisis that hit many Asian countries in the late 1990s. “What the country is experiencing is not a simple downward fluke in the economic cycle, which, when not tended properly, could lead to a massive slump that may even surpass that of the late 1990s Asian financial crisis," she said. Legarda appealed to the government to look for sustainable solutions to prevent the looming crisis as stressed the need to invest more on technologies, particularly on renewable resources, which she viewed will equip the country and lessen its dependence on imported fuel. “It is not the people's fault that we are heavily dependent on fossil fuel. It is because our technologies are still within this limitation, thereby making us all the more vulnerable to rising fuel costs," she said. "We should explore alternatives and arrive at a compromise on the different proposals being brought forward. It should be a balancing act between welfare losses and fiscal stability," she added. Aside from investment in research and development, Legarda urged the government to prioritize investments in agriculture, infrastructure and education. Meanwhile, Legarda commended the BSP's move to raise key interest rates by half a percentage point to fight the 11.4 percent inflation, the highest since January 1999 when the country got hobbled by the Asian currency crisis. "Since inflation is a global problem, our country will give off the impression that this economic trouble can be managed, thereby assuring potential investors that we are still worth investing into. And this is due to BSP's quick action," she said. - GMANews.TV