NDFP chief political consultant expects worse economic conditions in 2008
Ruth de Leon Executive Director International Information Office National Democratic Front of the Philippines (NDFP)
January 01, 2008
Prof. Jose Maria Sison, chief political consultant of the
National Democratic Front of the Philippines, declared today his
expectations of worse economic conditions in the Philippines in 2008.
His discussion of these bleak prospects followed up his previous expose
of the degradation of the Philippine economy by the Arroyo regime in
line with the US-dictated policy of "neoliberal" globalization.
Prof. Sison said, "The underdevelopment and chronic crisis of
the Philippine economy make it extremely vulnerable to the current
financial crisis and recessionary trend being generated globally from
the US. These have started to have a severe adverse impact on the
Philippines. The Filipino people will undergo unprecedented economic
and social suffering in terms of rising unemployment, decreasing real
income, soaring prices of basic goods and deteriorating social
services."
"The US and global demand for both the Philippine raw-material
exports and semi-manufactured re-exports will contract because of the
continuing industrial decline, reduced employment and recessionary
trend in all the imperialist countries. US economic growth is expected
to go down to less than two per cent from the usual level of around 3
per cent. The thirty OECD countries are expected to have an average
growth rate of less than 3 per cent from the usual level of more than 5
per cent."
Prof. Sison pointed out, "The US consumer market has
drastically contracted because of the decline of regular employment and
incomes as a result of the series of attacks on the US working class.
Under the piratical banner of neoliberalism, the monopoly bourgeoisie
has pushed down the wage level, cut back the social benefits and eroded
the democratic rights of the workers. It has undermined the US consumer
market and caused the crisis of overproduction to recur."
"And yet many of the workers were inveigled to engage in stock
speculation through easy credit and to let investment managers raid
their pension funds during the high-tech bubble in 1995-2000. The
bigger scam came when more workers and other people were drawn to far
easier credit for consumption during the housing bubble from 2001
onwards. In the wake of the ongoing mortgage meltdown, the American
consumers are without savings and are deeply indebted."
"The mortgage meltdown has acquired global dimensions because
US mortgages were repackaged and sold as financial products under such
fancy names as "structured investment vehicles" and "asset-backed
securities" to foreign banks and investment houses. Since August this
year there has been an epidemic of write offs and write downs,
involving the evaporation of more than USD 400 billion. This is
expected to result in the tightening of international credit by USD two
trillion as federal and commercial banks become more prudent in
lending."
Prof. Sison explained further the US financial crisis, "But
the financial crisis generated globally by the US is not only about the
mortgage meltdown and the necessity of writing down or writing off
"asset-backed securities" by foreign banks. The US national debt has
risen so fast from the level of USD 5.7 trillion in 2001 to USD 9.1
trillion at present. It is expected to rise to the level of USD 10
trillion before Bush steps down. The US has abused confidence in the US
dollar as the global currency ."
"The US trade deficit has rapidly grown to the annual level of
USD 850 billion because of the US industrial decline and outsourcing of
consumer goods, such as those produced in China, India and Southeast
Asia. The US budget deficit has also grown rapidly because of the tax
cuts to corporations and the wealthy and the unbridled spending for the
Pentagon and the wars of aggression. The Pentagon budget has risen to
the annual level of USD 600 billion and the costs of the Iraq war have
gone far beyond the officially admitted level of USD 500 billion for
"operations" and are already in the range of USD one to two trillion if
related costs are taken into account."
"The abuse of international credit by the US to cover trade
and budget deficits has led to a rapid decline of the dollar and to
pressures for an international credit crunch. The dollar decline is
generating defensive responses from such big US creditors like Japan,
China and the oil producing countries. To play safe, they are gradually
reducing their dollar positions in favor of other currencies or a
basket of currencies. The financial crisis of the US is serious enough
to start undermining the standing of the US as the sole superpower in
economic and politico-military terms, as the main engine of global
economic growth and as the global market of last resort."
Prof. Sison stressed, "In 2008 the underdeveloped and
semifeudal Philippine economy will face serious problems in relation to
the export of raw materials and the re-export of low value added
semi-manufactures in a shrinking global market as well as in relation
to the securing of new loans and selling bonds to service the
accumulated debt and finance the import of oil and other critically
needed goods. The international credit standing of the reactionary
state will be further degraded as its difficulties to repay the public
debt and collect revenues become obvious."
"As the international reserves will decrease conspicuously,
the Arroyo regime will not be able to conjure the illusion of economic
growth and raise the value of the peso against the US dollar and other
major currencies. In the real economy of the Philippines, the working
people and middle social strata will be beset by intensified
exploitation, increased poverty and misery and the heavier weight of
oppression. The social discontent and people's resistance will further
spread and intensify."###
REFERENCE: Ruth de Leon Executive Director NDFP International Information Office Tel.: + 31-30-2310431 Fax: + 31-847589930 Email: [email protected]
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