Oct. 3--The government believes the Filipino spirit will prevail this Christmas--even as the world grapples with record-high inflation, a tainted-milk scare and the US financial crisis.

Christmas for Filipinos will be "just like any Christmas--a merry New Year and a happy Christmas," said Socioeconomic Planning Secretary Ralph Recto, also the director general of the National Economic and Development Authority (NEDA).

The fearless forecast came only a day after Recto announced lower economic growth targets for the year and for 2009 and on the heels of a near 17-year high inflation of 12.5 percent in August.

But economist Victor Abola of University of Asia and the Pacific (UA&P) disagreed with Recto.

"Definitely not like last year, because last year was quite special. People really spent last Christmas," Abola said. The economist added that even though there was a hint of the US housing crisis present in December, the slowdown is "quite real" today.

"Inflation is really eating on the pocket of ordinary consumers," he said.

And as soon as Recto made his cheery forecast, he quickly added a caveat. "Gross happiness index of Filipinos" is considerably high during the holiday season.

"We shouldn't measure it in terms of GDP [gross national product]," Recto said.

GDP is the total value of all final goods and services produced in the country in a year.

Worse off today

Malou del Mundo, a 43-year-old mother of two, sided with professor Abola, saying that life this year is worse than that in 2007.

Del Mundo, whose husband is an overseas worker, added that her family is tightening its belt this year as commodity prices and weakening US dollar earlier in the year reduced their purchasing power.

The food scare brought about by the melamine-tainted Chinese milk, she said, has added to the burden of consumers. "How will you celebrate Christmas with fears that our milk isn't safe?"

The Bangko Sentral ng Pilipinas reported that the consumer confidence plunged to an all-time low as a result of concerns over rising prices of goods and services, a weaker peso and ballooning unemployment.

The confidence index went down to negative 52.8 percent in the third quarter from negative 43.8 percent in the second quarter, according to the central bank's Consumer Expectation Survey.

The decline was blamed on the significant drop in consumer expectations on the economic condition, which fell to negative 81.2 percent in the third quarter from negative 73 percent in the second quarter.

The government though, gave assurances that the country is safe and able to withstand the external shocks because of strong economic fundamentals that have been put in place by the Arroyo administration.

-----

To see more of The Manila Times, or to subscribe to the newspaper, go to http://www.manilatimes.net.

Copyright (c) 2008, The Manila Times, Philippines

Distributed by McClatchy-Tribune Information Services.

For reprints, email tmsreprints@permissionsgroup.com, call 800-374-7985 or 847-635-6550, send a fax to 847-635-6968, or write to The Permissions Group Inc., 1247 Milwaukee Ave., Suite 303, Glenview, IL 60025, USA.