Philippines Economy

They couldn't have picked a better place than Manila to host the Asia-Pacific economic summit. The Philippines, a poor country with a rapidly growing economy, reflects many of the promises and problems of Asia's development. Cheap labor is still the Philippines' main asset in attracting investment and increasing economic growth, whereas neighboring nations such as Malaysia have moved further up the chain of modern industry to sophisticated multimedia products.

An unusual alliance of left-wing workers and conservative business groups held a general strike Tuesday against Philippine President Joseph Estrada, who faces a Senate impeachment trial on corruption charges. The House of Representatives sent the impeachment charges to the Senate on Monday. But business groups and workers called on Estrada to resign, fearing that a prolonged trial will further damage the economy.

Although still recovering from the political instability of the 1980s and hurt more recently by natural disasters and the closing of U.S. military bases, the country has seen investment and growth increase slowly. The primary limit on the economy is a lack of adequate electricity. After infrastructure improvements, sustained growth is more likely in the next few years. Strong natural and human resources give the nation a head start.

Philippine President Joseph Estrada, struggling to hold on to power, on Monday rejected demands that he resign but offered his chief critic, Vice President Gloria Macapagal Arroyo, the top economic job, which she turned down. Estrada, facing threats of impeachment for allegedly taking millions of dollars in bribes from illegal gambling, extended an olive branch to his political foes and said he would seek their counsel to help the country out of its economic mess.

The uncertain, tainted and still-incomplete results of last week's election in the Philippines appear to present the Reagan Administration with the very dilemma it had hoped to avoid: a regime with no clear mandate, ruling over a nation polarized into two hostile camps. In the short run, U.S. diplomats in Manila are working to limit the damage, keeping alive the waning chances of a fair election and urging President Ferdinand E.

The year was 1987. Daniel Montano recalls sitting pensively in a Manila coffee shop as Agustine Jimenez, a 67-year-old former mine worker, told him a tale of a Philippine gold mine abandoned long ago. As Montano tells it, he studied a warped and faded photograph of a young Jimenez and five other Filipino miners holding 12 gold bars in their hands. The bars were from a mine in the Paracale district of the Philippines, an area Jimenez claimed was rich in gold deposits.

If President Clinton peeked at the back of his wristwatch, a Timex Ironman, he might be surprised to learn that this quintessentially American timepiece was made here in the booming center of the Philippines. Timex is one of the largest employers in this Southeast Asian country, with 6,000 employees working three shifts at a sprawling factory complex at the Mactan Island Export Zone, just offshore from the big island of Cebu.

The children of Negros are still starving to death--490 of them last year, according to government figures. The deaths continue even though tens of millions of dollars in international aid have been spent on the problem in the last two years. Teresita Tiangao's experience tells why. The other day she sat with her two children in the malnutrition ward of a hospital overflowing with critical cases, and she talked about her troubles.

The ad boldly states a basic precept among Philippine expatriates in California--people who may have both feet firmly planted in a new life, but maintain deep attachments to the old one. "Your remittance dollar supports more than just your family. It supports a nation," goes the pitch in a recent issue of Philippine News by BPI Express Remittance Corp., one of the plethora of foreign exchange services that advertise in Filipino community newspapers.

Night was coming on, and Saturnina Peralta was again preparing to send her two sons back into the streets, but 11-year-old Miguel decided he simply could not take it anymore. For years, Miguel and his six-year-old brother, Ricky, had been forced by their mother--at 30, a veteran prostitute--to beg, to steal and to solicit pedophiles in the seamy streets of Manila's Ermita tourist district.

The president of the Philippines said he will go ahead with plans to amend the country's constitution, despite protests Friday by more than 150,000 Filipinos who said the changes could endanger the nation's democracy. The protests in Manila and other major cities resembled in some ways the revolt that toppled dictator Ferdinand E. Marcos in 1986, with seas of yellow-clad protesters, confetti and the backing of former President Corazon Aquino and Roman Catholic Church leaders.

Amid the economic gloom that stretches from Tokyo to Bangkok, the Philippines suddenly has become an oddly joyous place as it conducts what may be the world's longest Christmas celebration--20 days from mid-December to early January--that turns this capital into a giant yuletide party. Clerks at the department stores wear Santa Claus caps, and Christmas carols fill hotel lobbies and cafes. Huge gold stars hang from light poles along Roxas Boulevard.

A country-by-country look at the economic crisis that has swept Asia, and the challenges nations face in restoring growth. (Stock market and currency changes are since Jan. 1. Currency changes versus U.S. dollar). THAILAND * Currency decline: -36% * Stock market decline: -52% * Population: 60 million. During the export boom of the early-90s, Thai banks flush with cheap foreign capital lent heavily to domestic borrowers, fueling a real estate bubble. Imports surged.

So far, investors appear to believe that the currency devaluations in Thailand and the Philippines were the right medicine. In Thailand, the main stock market index has surged to 628.55 from an eight-year low of 464.77 on June 19, for a gain of 35%. In the Philippines, the composite stock index rocketed 190 points on Friday, or 7.6%, to 2,701.14, immediately after the nation's central bank stopped defending the peso. The index still is down 15% year-to-date, however.

When it's going your way, capitalism naturally seems like the only logical economic system. What's not to like about the gloriously healthy U.S. economy and the ever-rising stock market, for instance? But when capitalism goes awry, the cost in human terms can be devastatingly high. And suddenly the wisdom of abiding by a free-market system is lost on many people.

For most of this century, sugar was king. A handful of barons controlled the Philippines' top export commodity, accumulated vast fortunes and ruled their fiefdoms with iron fists and private armies. But big sugar producers are now begging for help, saying they will be forced out of business along with more than 60,000 workers if tariffs on imported sugar are reduced as planned in July. "If nothing changes . . . most sugar producers will be on the verge of bankruptcy," Negros Occidental Gov.

Economy Expanded 5.2% in 1st Quarter: Economists credited steady manufacturing growth, rising exports and a recovery in agriculture for the rise in the gross national product. The National Economic Development Authority said the gross domestic product, which does not include remittances from abroad, grew by 4.8%. Economists and analysts interviewed by Bloomberg Business News predicted continuing GNP growth ranging from 4.7% to 6.5%.

At U.S. businessman Calvin Cox's offices here, shifts of Filipinos earning 90 cents an hour keep the keyboards busy 24 hours a day, 365 days a year, typing documents into computers. The medical, scientific or technical texts are punched in from originals that were edited on paper in the United States and shipped here by Federal Express. The electronic copy is then zapped back to the U.S. over telephone lines for publication in magazines or books.

They couldn't have picked a better place than Manila to host the Asia-Pacific economic summit. The Philippines, a poor country with a rapidly growing economy, reflects many of the promises and problems of Asia's development. Cheap labor is still the Philippines' main asset in attracting investment and increasing economic growth, whereas neighboring nations such as Malaysia have moved further up the chain of modern industry to sophisticated multimedia products.