Philippines - Domestic policy

Macapagal-Arroyo's domestic economic policy and programs have focused mainly on controlling fiscal, budgetary, and monetary policies with the goal of creating stability for investment, jobs creation, greater economic activity, increased tax revenues, and poverty reduction. She has made anti-poverty programs and housing pillars of her policies. Although her government has missed its targets for budget deficit reduction, it has kept the deficit within the ceilings at 5.3% of GDP in 2002. The deficit is expected to shrink slightly to 4.7% in 2003, and 4.2% in 2004. Presently, it amounts to $3.7 billion. Similarly the government has kept down inflation at levels lower than expected. In 2002, inflation was 3.1%, and is expected to rise slightly in 2003 to 3.4%.

The sad reality in the Philippines is that over 35% of the population still lives in poverty. Unemployment was 10.1% in 2000, 9.8% in 2001, 11.4% in 2002, and is expected to rise to 12.2% in 2003. GDP growth has improved from 3.3% in 2000, 3.8% in 2001, to 4.6% in 2002. It is expected to drop slightly to 3.9% in 2003. Insurgency and terrorism have reduced tourism and weakened investor confidence. In the wake of September 11, 2001 the number of visitors to the country dropped by 11.3%. El Niño- and La Niña-related weather patterns have impacted agricultural production.

Macapagal-Arroyo's policies include privatization of the electric utility, development of off-shore oil and gas deposits in Malapayang Sound off Palawan, the passage of an anti-money laundering bill, and the dismantling of terrorist and insurgency movements in Mindanao. She has achieved passage of a power bill, has put notorious kidnappers behind bars, and has made progress in the fight against corruption and drugs. The jury is still out on whether her admistration will signficantly impact housing. One of her remaining goals is to establish conditions to bring about clean elections in 2004. However, her declaration that she will not be a candidate in 2004 could make her a lame duck and weaken her policy agenda.

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