Estrada regime: at the brink of death:
Rapidly plummeting economic crisis

Basahin ang artikulong ito sa Pilipino

Within only a little more than two years under the Estrada government, the Philippine national economy continuously plunged due to the blind implementation of trade and investment liberalization, privatization, denationalization and deregulation�all policy dictates of US imperialism�as well as the aggravation of feudal and semifeudal exploitation in the countryside and thoroughly worsening bureaucratic anomalies and corruption.

Estrada bears direct responsibility for the implementation of policies that have led the economy into this quagmire. He must pay for his all-out puppetry that has caused the grave economic crisis and impoverished the people. However, it is incorrect to expect that the crisis would be resolved with the ouster of Estrada. In fact, it will worsen further in the future with the further decay of the semicolonial and semifeudal social system.

Illusions of economic growth. Even government statistics cannot deny the fact that the Philippines is undergoing a grave economic crisis. Especially this year, investments and production fell sharply, resulting in an increase in the unemployment rate. Even big business doubts the 4.5% economic growth drumbeated by Estrada.

The Estrada government boasts that for the first time since 1973, a trade surplus was recorded in 1999 ($4.294 billion). As of this September, a surplus of $4.24 billion has been recorded.

This foreign trade surplus is decidedly deceptive. In fact, the government has made no steps to address the roots of the historic problem of unequal trade. This surplus has not resulted from any major advance in industry, local production and volume and value of exports. In fact, by September, export growth had slowed down to 9% (from 17% in September 1999).

This surplus is incongruous because this is an indication, above all, of the further decline in local production that is dependent on imported components and machinery. In fact, there is nothing new in the type of products being exported and imported and their relationship to each other. The principal export products of the Philippines�electronics and electronic components, garments and garment accessories and iginition wiring sets�are all dependent on imported components and machinery. The principal imports of the Philippines are composed of electronics and electronic components, mineral fuels, lubricants and related materials and telecommunications equipment and electrical machinery�all basic components of export-oriented production.

This July, the overall value of foreign direct investments fell by 56%. This is one of the reasons for the slowdown in external trade.

Local investments have declined by more than 98% since 1998. The continuous rise in oil prices and the devaluation of the peso against the dollar have caused sudden increases in production costs. This has resulted in business slowdowns, especially of local enterprises, including small exporting firms. By August, there were 951 enterprises in Metro Manila that were recorded to have closed shop, while 166 implemented �temporary� layoffs, job rotations and a reduction in working hours.

The rate of unemployment continues to rise. This cannot be completely concealed even by government statisticians� magic tricks. In October, the unemployment rate reached 11.1%�the highest since 1986. While this is already considered high based on technocratic standards, the fact is the real number of unemployed is much higher than this. Everything considered, as much as 45% of the total work force are without employment.

The number of unemployed continues to rise because expansion in production is unable to keep pace with the increase in the labor force.

The financial crisis persists and threatens to explode anew. In 1999, dollar reserves of the Bangko Sentral were artificially boosted, primarily through the renewed entry of foreign speculators. However, the rate of capital flight is slowly increasing especially after the the political crisis that exploded in October. In this regard, the value of the Philippine stock market had dropped by 53% by November.

By the end of 2000, external debt will have reached $55.5 billion, 14% higher than in 1998. Principal and interest payments for 2000 are expected to reach $11.11 billion, 33% more than the payments made in 1998.

The budget deficit in 1999 ballooned to P111 billion from P45 billion in 1998. By November 2000, the budget deficit had reached P114.44 billion and is expected to reach P120 billion by the end of the year. Despite the P85-billion target for next year, some government officials expect that the budget deficit will surpass that of this year. This budget deficit springs from the big shortfall in tax collections primarily brought about by the reduction in tax revenue from business which is now on the decline, aside from corruption and the wasting of government resources on unproductive expenses (such as showcase infrastructure projects, military operations and gargantuan debt servicing). Estrada�s responsibility. Even under the Ramos government, the principal statutes and policies which upheld liberalization, privatization and deregulation including the Foreign Investments Act (the law that provides incentives to foreign investors), the Bank Liberalization Law (which gives foreigners the right to establish and operate local banks) and the Mining Act of 1995 (which liberalizes the entry of foreigners in the mining industry) had already been put in place.

Still, the extent of Estrada�s responsibility has not at all been diminished due to his all-out implementation of these policies. Estrada has not carried out any measure to veer away from the policy dictates of the IMF-WBWTO, and has instead implemented them with a zeal. In order to complete the opening up of the economy, Estrada approved in March the Retail Trade Liberalization Act which opened one of the last frontiers of the national economy�retail trade�to foreign control.

At a time when other governments around the world are cutting back on all-out liberalization, privatization and deregulation because of the negative effects on their economies, the Estrada government continues to blindly carry these out and break down every policy or statute that upholds a sovereign national economy.

The crisis will continue. We must take advantage of the struggle to remove Estrada from power in order to present to the Filipino people their national and democratic program especially on the economy. The call for the ouster of Estrada should include the demand to hold Estrada responsible for his crime of selling out national sovereignty. The handling of economic questions, including forwarding the principal demands of workers, peasants, fisherfolk, employees and other sectors among the toiling masses for wage increases, land reform and others, help in exposing the mendacity of Estrada�s �promasses� stance and the need to put an end to his regime. This also clarifies the distinction between the toiling masses, on the one hand, and the reactionary opposition on the other�that are now united in the struggle against the ruling regime.

By persistently asserting these demands, the Filipino people are immediately guided as to the course of their struggle under the regime that would replace the present Estrada government. The economic crisis will continue in the coming years. As long as the semicolonial and semifeudal system prevails, the Philippines is sure to sink further into the quagmire of a never-ending crisis.

The revolutionary forces must adeptly study and clarify the historical roots of the economic crisis. The incorrect views of the reactionaries should be exposed: that the crisis has been brought about by the all-out rottenness and anomalies of the Estrada government or that the Philippines is now on the way to recovery from the crisis that the Ramos government left in its wake.

Clarifying the roots of the economic crisis is one of the ways of solidifying the gains in the struggle to overthrow the Estrada government.

December 2000
English Edition

	Editorial: With the onset of 2001, unleash a powerful storm that shall put an end to the US-Estrada regime
	Selected quotes Mobilize the broad masses of the people to deliver the death blow to the Estrada regime �Armando Liwanag
	Estrada regime: at the brink of death: Rapidly plummeting economic crisis
	Estrada regime: at the brink of death: Puppetry, corruption and fascism
	FASCIST STATE ON A RAMPAGE
	Trouble in the neocolonies
	Paving the way for an international league of people�s struggles
	News of struggle
	More news from Bicol