MANILA, Philippines - Economists warned of a "very severe" impact of the global economic slowdown and the US financial crisis on Filipinos, 27 percent of whom are living below the Asian poverty line and at least 40 million of whom are dependent on remittances from overseas workers.
Still, the economists assured that the Philippines will not fall into a recession, which is technically defined as a negative economic growth posted by an economy for two consecutive quarters.
University of the Philippines economist Raul V Fabella said the country's gross domestic product (GDP) will likely expand within the three-percent level as growth of about four to 4.5 percent "is a hurdle." He added that as a pessimist, he sees the economy growing by only 3.5 percent next year.
With growth still possible, albeit at a much slower pace, Fabella said a depression is also unlikely.
"But it doesn't mean the suffering will be less steep. The pain will probably be, especially because of income distribution, very severe," Fabella said during a forum organized by the Action for Economic Reforms and the Friedrich Ebert Stiftung, a non-profit German group which promotes social democracy.
Fabella said the impact of the crisis would be more felt by the Philippines' 25.4 million population living below poverty line, as well as the families of overseas Filipinos who are dependent on remittances. According to central bank estimates, almost half of the country's 90 million population benefit from remittances sent by over eight million Filipinos working abroad.
Filomeno Sta. Ana, coordinator of Action for Economic Reforms, said the global economic slowdown may result in a drop in exports which could lead in company shutdowns and the loss of jobs here.
"It will be severe for families with low income and the poor because jobs are being destroyed and families are receiving less income," Sta. Ana said.
Former Finance Secretary Ernest Leung said the slowdown could also lead to job cuts abroad.Leung, who used to be president of the Philippine Stock Exchange and executive director of the Philippine Deposit Insurance Corp., is now with the Foundation for Economic Freedom.
"We may see the dislocation of our Filipino expatriates. Some may be laid off and some of these are sources of remittances," Leung said. - GMANews.TV