Prospects

How resilient is the Philippines really in riding out the current global economic crisis?

Very vulnerable, considering that relying on domestic consumption to rejuvenate the economy alone won't be enough without external demand coming from the US or Japan. As job losses continue to pile up in the US, consumption consequently takes a downturn, as can be seen by lower housing sales and the difficulties faced by the US auto industry. With around eight (8) million Filipinos working abroad, remittances-- which hit around US$17 billion in 2008 --are likely to grow slower this year.

The thing is, since the Philippines do not feature prominently in the financial markets, it is somehow less severely affected compared to say other countries with huge exposures to complicated financial instruments in the US.

Because of this, the country had less access to various capital instruments which probably explains the sluggish growth of the economy as well. However, this has clearly proven to be an advantage since the country's minimal exposure to risky financial instruments has made it more resilient to the credit crunch risks in the US.

Obama's fiscal stimulus plan for the US economy is getting a lot of flak because it relies mostly on tax cuts, rather than job creation. I think the plan is sound, though. Obama is clearly out to save ailing companies first by giving them tax breaks thereby allowing them to build up their savings first, rather than spending immediately on big infrastructure projects to stimulate demand (does the US really need another highway?) Preventing more companies from going down the drain could stem the downward trend in job cuts, and not aggravate the already-sluggish consumption spending.