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MANILA, Philippines -- President Gloria Macapagal-Arroyo has assured the Filipino-American community in Chicago that her government has built a "firewall" to cushion the impact of the looming recession in the United States on their relatives back home.
"I'm sure you'd like to know what's happening at home, while no one can predict the full impact of the current financial crisis on the Philippines, our economy is stronger than it has been in generations," Arroyo said in a speech aired on government television on Wednesday.
"Because tough choices were made, we've been able to build a firewall around the Philippines, our economy, that has slowed down and somehow softened the effect on the Philippines of the global crisis," she said.
Arroyo cited the value added tax (VAT), which, while making her unpopular, gave government enough revenues to invest in infrastructure development and pro-poor programs.
"You must have heard of the VAT. Its result has been on the one hand more unpopularity for me, but on the other, to save the day for our country now that there is a global economic crisis," she said.
The President also assured the Filipino-American community that she was "working hard" to bring the prices of food and fuel down.
"We know that your relatives back home are as concerned as you are here about security and they are as concerned as you are here about the buying power of wages and the remittances that you send them, we are concerned as well," she said.
The Makati Business Club (MBC), some members of which are critical of the Arroyo administration, has predicted a recession in the early part of 2009.
Arroyo's economic team said a slowdown, not a recession was likely.
But Executive Secretary Eduardo Ermita is not discounting the possibility of a recession.
"You might say yes, being realistic," Ermita told reporters at the Palace, when asked if a recession could hit the country.
