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.