Press Release
November 11, 2008

Loren sees MSMEs sparking local economic growth

Unless addressed, the Philippines stands to feel the effects of the global economic slowdown like sluggish trading, job losses and more poor Filipinos going hungry.

Senator Loren Legarda issued the statement yesterday as she asked the government to focus on micro, small and medium enterprises (MSMEs) to generate more livelihood opportunities.

"It is necessary for the government to drive domestically induced growth by helping our own firms, particularly MSMEs through increased access to capital and credit," Loren said.

Loren also cautioned the country's economic managers against complacency and to be straightforward on telling the nation about the real score about the country's economy.

Chair of the Senate Economic Affairs Committee, Loren noted reports citing a statement by Union Bank of Switzerland (UBS) that reduced OFW remittances may be offset by the easing further of inflation.

"The reduction in inflation may not happen so it is not wise to pin our hopes on something like that offsetting the expected reduction in foreign exchange remittances," she said.

A UBS economist, Edward Teather, had warned that the slowdown in the global market next year might result in a $800-million decline in remittances from overseas Filipino workers between 2008 and 2009, although declining import prices would keep the current account surplus rising to provide support for the peso.

One positive step that could address the looming recession is for the government to create a stimulus that will pump-prime the economy and offset the slowdown, she said.

"Given the limited resources, we should ensure concerted programs and projects that will not only provide cushion but stability and sustainability as well," Loren said.

If the country's MSMEs are given access to capital and credit, the country would have sustained economic activities that would create jobs for the benefit of returning OFWs, as well as Filipino seamen, 40,000 of them, who, the Department of Labor and Employment (DOLE) has reported, could be displaced due to prevailing global economic crisis.

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