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Impact of U.S. downgrade on Philippine economy

08-08-2011 11:20 BJT

MANILA, Aug. 8 (Xinhua) -- Government officials here both from the present and past administrations have expressed grave concern over the impact of the credit rating downgrade in the United States on the Philippine economy.

Noted economist Benjamin Diokno described the impact of the downgrade on the local and global economy as "serious," adding that in the Philippines, it would result in lower exports, slower inflow of remittances from overseas Filipino workers, and reduced foreign direct investments (FDIs).

Diokno, currently an economics professor at the University of the Philippines, served as budget secretary during the administration of former President Joseph Estrada.

Over the weekend, Standard and Poor's (S&P) downgraded the U.S. credit rating from triple A to double A-plus, a move that economic analysts described as an unprecedented blow to the world's largest economy and could trigger another world recession worse than the one in 2008-2009.

S&P cut the AAA rating that it had given to the United States since l941 over concerns about the U.S. government's budget deficit and rising debt problem.

According to Diokno, in a "volatile and uncertain world economy," even the public private partnership (PPP) program, the centerpiece of the economic policy of the administration of President Benigno Aquino III, would suffer from the U.S. downgrade fallout.

Editor:Wang Xiaomei |Source: Xinhua

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