Cabinet shuffle
Election, death, and exhaustion are some of the reasons for the changes in the Arroyo Cabinet. But the appointments could be temporary depending on who will be the next president by June 2004.
Finance Secretary
Juanita D. Amatong, Undersecretary for the International Finance Group, replaced Jose Isidro Camacho who resigned due to stress on the job. Secretary Amatong has been with the department since March 2001. She was a former Managing Partner of Resource and Measures Associates, Co., a consultant for Chemonics International and for a time Executive Director of the World Bank Group. She is expected to address with urgency the reduction of the fiscal deficit, improve revenue collection, and keep the 91-day Treasury bill rates stable.
Foreign Affairs Secretary
Delia Domingo Albert, Undersecretary for International Economic Relations and Philippine Senior Official for the Asia-Pacific Economic Cooperation (APEC), replaced Blas Ople who passed away on 14 December. Secretary Albert is a career diplomat and has represented the Philippines in various capacities in several European countries and Australia. She is expected to work on the inclusion of undocumented Filipinos (i.e., illegal aliens) in the U.S. that would be granted amnesty and help the Comelec oversee the proper implementation of the Absentee Voting Law in 86 diplomatic posts.
Justice Secretary
Ma. Merceditas N. Gutierrez, DOJ undersecretary, replaced Simeon Datumanong who is running for a congressional seat. Secretary Gutierrez has been with the department since 1983 as State Counsel and in the past served as legal staff in NEDA and the Office of the President. She has chaired and represented the country in a number of conventions and treaty negotiations. Her hands will be full with the extradition of Atong Ang and Rod Strunk and other controversial cases, as well as the prosecution of criminal and illegal drugs cases. National Defense Secretary
Eduardo R. Ermita, Presidential Adviser on the Peace Process and Chairman of the Government Peace Negotiating Panel in Talks with the Moro Islamic Liberation Front, replaced Angelo Reyes who was forced out by disgruntled military men accusing him of corruption. He was already the Acting Secretary since April but took his oath only in October. Secretary Ermita served as Vice Chief of Staff of the Armed Forces of the Philippines in 1988 and congressman from 1992 to 2001, representing the first district of Batangas. The peace process, corruption in military procurement, the fight against insurgents, and the threats of terrorism are his major problems.
Trade and Industry Secretary
Cesar A.V. Purisima, Chairman and Managing Partner of auditing firm SGV & Co., replaces Mar Roxas who will run for the Senate. Secretary Purisima is chairman of the Philippine-France Business Council and co-chairman of the Philippines-Thailand Business Council. As trade secretary, he would need to address consumer protection, domestic trade, and declining exports.
| Signals |
 Demand for money stepped up in end-November 2003 as domestic liquidity grew 4.5% from 2.5% in end-October 2003. At the same time, the component net foreign assets likewise expanded to 19.9% from 19.8% on account of sustained investments in foreign currency-denominated assets by deposit money banks. Net domestic credits to the public sector, expanded to 13.4% from 11.2%. Credits to the private sector also expanded at a modest pace to 2.6% from 2.3%, reflecting subdued bank lending.
 Tourist arrivals to the Philippines shrank 4.2% to 1.67 million from 1.74 million in the first 11 months of 2003 despite recovery in the past three months, including a 17.6% rise in November 2003. Among the country’s major sources of visitors, only arrivals from Korea and China increased, by 3.0% and 15.0%, respectively. The United States and Japan, meanwhile, remained the top two sources of visitors to the Philippines. SARS, the war in Iraq, peace and order problems, and negative travel advisories on the Philippines ate up the gains from the WOW Philippines campaign of the Department of Tourism in 2003.
The country’s foreign debt stock rose to US$56.3 billion in end-September 2003 from US$53.6 billion in end-September 2002. Medium and-long term loans continued to account for 89.0% share of the country’s external debt stock as the maturity profile of MLT improved to 17.0 years from 16.4 years. The country owed 45.0% of its obligations to official creditors, down from 45.5%; 29.0% to bond and noteholders, up from 26.0%; and 18.0% to banks and other financial institutions, down from 23.0%.
The country’s balance of payments surplus declined 83.6% to US$108 million in 2003 from US$660 million in 2002. Due to the 6.7% slowdown in the deployment of land-based workers in 2003 OFW remittances increased below expectations at only 4.8% to US$6.9 billion from US$6.6 billion a year ago. On the other hand, net portfolio investments rose 219.2% to US$675.8 million from US$211.7 million. While portfolio inflows grew 28.6% to US$1.6 billion from US$1.3 billion, portfolio outflows fell 9.2% to close to US$1.0 billion from US$1.1 billion.
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