Finance Secretary Carlos Dominguez III on Thursday downplayed any impact on the economy of the declaration of martial law in Mindanao, saying the 6.5 percent to 7.5 percent growth target this year remains doable.
“The economy is in no way threatened by the imposition of martial law. The military is in full control of the government installations and major infrastructures on the island,” Dominguez said in a statement two days after President Rodrigo Duterte put the entire Mindanao under military control.
“Martial law will ensure that these facilities are protected so that business transactions will be unaffected,” he said.
The country’s largest business group, however, expressed concern over the martial law declaration.
“With PRRD’s martial law declaration in Mindanao, there is concern from the business community,” PCCI president George Barcelon said in a statement.
“But we have faith in our president’s firm control and determination to eliminate the threats and to protect the entire community. Hopefully the issues will be resolved as quickly as possible with minimum loss of lives and properties,” said PCCI president George Barcelon.
The group said it was consistently supporting the initiatives of the Duterte administration since day1.
“This drastic and firm action by our President should send a clear message to radical groups that for such heinous crimes they will suffer the consequences. After which things should normalized,” the group said.
Dominguez said the country’s growth momentum remained on track and the declaration of martial law would quickly and decisively contain the threats of lawless elements in a limited area distant from the island’s major business centers.
“The economy is rapidly growing; it is expected to grow by 6.5 percent to 7.5 percent during the year with both internal and external demand contributing evenly to growth,” Dominguez said.
President Duterte declared the entire island of Mindanao under martial law after heavy fighting broke out between government troops and alleged members of the terrorist Maute group.
Although Marawi City is Lanao del Sur’s economic hub, Dominguez said the threats by lawless elements were contained in areas far from Mindanao’s major business centers and the military was doing everything to minimize these.
Duterte earlier said the “compelling reason” for the declaration of martial law was the involvement of elements linked to the Islamic State of Iraq and Syria group in the Marawi conflict and that the whole of Mindanao was put under military rule to allow the government to best respond to the possibility of the terrorists seeking sanctuary or sowing terror in other parts of the South.
Finance Department data showed that the Autonomous Region in Muslim Mindanao, where Marawi City is situated, accounted for P50.6 billion of the P8.1-trillion gross domestic product (at 2000 constant pesos) of the country in 2016, or 0.6 percent of the whole country. Of the 17 regions, it is the smallest. The Cordillera Administrative Region, the second smallest, has twice ARMM’s share.
Mindanao’s economy expanded last year by 6.4 percent, or up from the 5.8 percent jump in 2016 but accounting for just a 14.4 percent share of the country’s GDP in 2016.
The declaration of martial law caused the peso to touch the 50-a-dollar level on Wednesday before closing at 49.995 per dollar, P0.17 weaker than the 49.82 Tuesday. It was its weakest level in six weeks since it settled at 50.08 a dollar on April 7, 2017. The peso rebounded Thursday to settle at 49.83 against the greenback.
ING Bank Manila senior economist Joey Cuyegkeng said the impact of martial law to the domestic financial markets was likely to be limited and that calm would likely return after the initial reaction.
Bangko Sentral ng Pilipinas Governor Amando Tetangco Jr. said the declaration of martial law might result in some transitory or temporary cautiousness, “but in the end I think it will lead to a positive impact on sentiment.”
“I think it’s a very decisive move in the part of the government, and the main objective is really to improve the security and peace and order situation…,” Tetangco said.
Meanwhile, the National Food Authority assured the public there was enough rice in Marawi City.
“We assure all residents of Marawi and the rest of Mindanao that we have enough rice in NFA warehouses in the area. We are ready to issue rice to relief-giving agencies such as the Department of Social Welfare and Development (DSWD), Philippine National Red Cross (PNRC) and local government units anytime they would need it to distribute to the affected residents,” NFA administrator Jason Laureano Aquino said.
The NFA in Marawi City had 38,000 bags of rice in its warehouse.
“We have instructed our field personnel to be ready to respond to any need for rice stocks for the victims. Our warehouse in Marawi has been padlocked with reinforced security personnel inside to guard the stocks. We also have enough personnel to release them when needed, and we have coordinated with the local police and military for the safety of our stocks and personnel,” Aquino said.