No Longer A Basket Case (Part I)
Without trivializing the loss of even one human life, one can be glad that the tragedy that struck the islands of Central and Eastern Visayas of the Philippines last November 8 happened in 2013 when the country has finally shed its notoriety as the "sick man of Asia." The Philippine economy is in a much better position to meet the challenge of helping the stricken communities in the arduous task of rehabilitation, reconstruction and recovery. The Government has a very healthy fiscal position, with its deficit much below the prudent limit of 4% of GDP. The private banking sector is awash with liquidity, thanks to the quantum leap of the savings rate from the low levels of 18% in the 1990s and early 2000s to more than 30% of GDP, owing mainly to the remittances of overseas Filipino workers (OFWs) of more than $20 billion yearly. Inflation is below 3% and the international reserves are at an all time high of 11 months of import coverage, enabling the Central Bank to manage the volatility of the foreign exchange rate that is expected to hover at the P43 to 44 to a US dollar for the next year or so.