Rebuilding in Japan to boost PHL economy in the long run: BSP

Projected to get a jumpstart from reconstruction efforts in Japan, the benefits of an economic boost in the quake- and tsunami-crippled country will likely trickle down to the Philippines, Bangko Sentral ng Pilipinas (BSP) Gov. Amando Tetangco Jr. said Sunday. Tetangco told reporters that the mega-quake and the ensuing tsunami that devastated Japan will create a “somewhat negative" impact on the Philippine economy – in the short term. “But over the medium to long term, it is going to be positive because of the rebuilding and reconstruction efforts that will boost the Japanese economy," he explained. Reuters has also reported that the disaster might “shake Japan out of its collective economic and political torpor of the past two decades and provide a new sense of purpose for a nation that has seemingly lost its way." The report by Alan Wheatley, Reuters global economics correspondent, says that a sense of “public morality" among a large part of Japan’s population could move Japan in a positive direction. The devastation in northeastern Japan likely killed at least 1,000 people, setting structures on fire and sweeping parts of some cities away. Hitting PHL economy as well Tetangco said the Aquino administration is still completing its assessment of the disaster’s impact on the Philippine economy, but gave a preview on the negative repercussions to the country’s trade, the remittances of overseas Filipino workers (OFWs), and the country’s access to assistance funds from Japan. The BSP chief described Japan as one of the biggest buyers of Philippine-made export products, accounting for 16.2 percent of the Philippines’ total shipments last year. Also, cornering 12.3 percent of the country’s imports last year, Japan is also one of the Philippines’ biggest source of imports. Tetangco added that also at stake are the remittances of OFWs from Japan, that account for 4.7 percent, or $883 million, of the OFW remittances of $18.76 billion last year. The BSP chief also said authorities must look into the disaster’s impact on official development assistance funds, as the Philippines remains the fourth largest recipient of concessional loans from Japan, next to Indonesia, China, and India. He said another subject for review is the impact of the disaster on the country’s inflation rate, considering that the disaster might pull up demand for non-nuclear forms of energy such as oil. Flour millers, on the other hand, have projected a drop in flour prices after Japan – the second largest importer of wheat from the United States – has posted a lower demand for wheat, pulling flour prices down. Tetangco said the BSP will consider the situation in Japan as part of its environmental assessment during the second policy-setting meeting of the Monetary Board on Thursday. – with reporting by Paterno Esmaquel II/JE, GMA News