Arroyo eyes 'bold' steps to boost economy

Arroyo eyes 'bold' steps to boost economy

MANILA (Dow Jones): Amid a slumping peso and worsening fundamentals, Philippine President Gloria Macapagal Arroyo said Friday that "bold" measures will be announced next week to overcome the internal problems bedeviling the economy.

At a news briefing, Arroyo declined to elaborate on what form the measures would take, and it also wasn't clear from her comments whether they would be economic or political.

"Some bold measures will be undertaken in the coming days to overcome the internal problems that beset our economy," she said. "I know many of us are getting impatient, but I hope our economy will spring back to life soon." she said.

The announcement comes after a rocky week for the peso, which fell against the dollar to a five-and-a-half month low of 53.10 pesos, its lowest level since January's leadership crisis.

In afternoon trading Friday, the dollar averaged 52.902 pesos on the spot market, down from 52.980 pesos at the previous close.

"The strength of the peso depends on the performance of the total economy and external factors," Arroyo said.

"I know what ails the economy and there are no quick fixes for structural faults," she said.

Observers believe that if the measures are economic they are highly unlikely to be capital controls, but may include a gameplan to speed up a number of pending economic bills, such as measures to strengthen the banking sector.

Vickers Ballas Investment Research regional strategist Eddie Lee believes Arroyo may announce steps to pump-prime the economy and speed up privatizations.

The economic picture is gloomy: the balance-payments surplus is shrinking, exports and investments have slowed dramatically, inflation is on the rise and the government is grappling with a ballooning budget deficit.

A hostage crisis in the southern Philippines and wider security concerns are also rattling Manila's financial markets.