This was the reaction of the umbrella group Bagong Alyansang Makabayan to the downgrading of the United States credit rating and the Philippine government's statement that the downgrade should be a wake-up call for the US. Palace spokesman Ricky Carandang recently said that the downgrade should push the US to address its economic issues.
"The reality is that the credit downgrade is just a result of a much worse crisis facing the US economy. In the midst of this crisis, the Philippine government must rethink and reverse many of the economic policies that make Philippine economic growth dependent on US investments and economic aid," said Bayan secretary general Renato M. Reyes, Jr.
"Now is the time for the Philippine government to embark on a self-reliant economic development program instead of pinning its entire hopes on an ailing US economy that's plodding through a protracted depression. We must move beyond being an export-oriented, import dependent, foreign-investment and foreign-debt driven economy," he added.
Bayan said that the immediate causes of the US debt crisis is the huge spending made by the US government to fund the trillion-dollar bail-outs of banks during the financial turmoil in 2008, and the continuing massive spending for US wars abroad. It said that the underlying cause of the current crisis is the crisis of overproduction in the US economy because the markets can no longer absorb the commodities being produced by the economy. Because of lower wages and unemployment, consumption has slowed down, causing the rate of profits to drop. Bayan said that the monopoly capitalists try to keep their profits up by engaging in various forms of finance speculation, which ultimately led to the disastrous financial and economic crisis of 2008.
The group also said it is useless to debate whether the credit downgrade is justified or not because the US economy is already in a protracted depression. The group warned the Philippine government against continuously depending on the US economy for the Philippines' own growth.
"We need a new path towards growth. It is foolish for the Philippine government to keep on pushing foreign-investment driven public-private partnerships or to depend on foreign investments for jobs creation. Economic development primarily hinged on external factors, and not internal growth drivers, will be bound to fail, especially now with the crisis gripping the US," Reyes said.
"It's not just a matter of finding a new alternative global reserve currency as the Department of Finance wants us to believe. It is a matter of finding a new economic development plan for the Philippines that focuses on national industrialization, land reform and meeting the people's needs," he added.
According to the Bangko Sentral ng Pilipinas, foreign direct investments to the Philippines in 2010 shrunk by 13% (compared to 2009). The same downward trend has continued during the first quarter of 2011. Meanwhile, the growth in exports for the first quarter of 2011 slowed down.
The Philippine government already admitted that the US debt crisis will be causing some uncertainties among investors and may slow down the global economy.
Bayan meanwhile expressed solidarity with the American people who are struggling against massive unemployment, huge social cutbacks, homelessness and hunger as a result of the current crisis. ###
from: www.bayan.ph
