'Fixed-interest property loans signal boom'

By Mia Gonzalez
Reporter

PRESIDENT Arroyo's economic adviser on Monday predicted the "astounding" performance of the economy following the decision of three banks to offer 25-year property loans fixed at 11 percent.
           
Lakas Rep. Joey Salceda of Albay made the prediction at the Kapihan ng Bayan at the Sulo Hotel, where he also defended the Japan-Philippines Economic Partnership Agreement (Jpepa) against claims that the bilateral trade pact would weaken the local steel industry.
           
"For the first time in the history of this country, big banks are offering property loans for 25 years fixed at 11 percent. The effect of this on the economy will be so astounding that it will surprise even the most [skeptical]," Salceda said.
           
He said that the loan, offered by Security Bank, Banco de Oro and Metrobank, does not even require a secondary mortgage.
           
Salceda also said that other sources of hope for better things to come are the drop in the government's interest payments from P339 billion to P317 billion next year—another first for the country—and the Philippines' good fiscal standing.
           
He said the Philippines has only recovered 20 percent of the value of the peso since it was devalued in July 1997 during the Asian currency crisis, "and so the economy will still go far."
           
Asked about the Jpepa, Salceda maintained that  "the Philippines is a big winner" in sealing the deal with Japan, and is one of four legacies that President Arroyo would like to leave behind when she finishes her term in 2010, and is a component of her "cohesive economic strategy for competitiveness."
           
He said the local steel industry claims that their Japanese rivals "would overpower them" because of the implementation of Jpepa but he noted that power rates, which account for half of the cost of steel, are much lower in the Philippines, than in Japan.
           
He said that power rates in Japan cost P12 per kilowatt hour; in the Philippines, it is at P6.4/kWh.
           
"It does not seem reasonable for the steel industry to demand protection when in Japan, you have a very high cost of P12/kWh and here, it is only P6.4. How would they lose this way? What do they want to do? Half of the cost of steel is electricity," he said.
           
Salceda said that the other legacies that the President wants to leave behind are fiscal reforms, the so-called development of the so-called superregions, Charter change, and market access programs like JPEPA, and "possibly" the RP-US Free Trade Agreement.

Business Mirror
November 21, 2006