No doubt about it, the bright spot this year was the economy. Despite the polit-
ical wrangling and uncertainty of the government’s rule, a rise in remittances
by Filipinos overseas as well as overall macroeconomic stability meant relatively
high levels of economic growth, estimated at 6% for 2006.
Although she is besieged on the political front, the economy remains Ar-
royo’s strength. During her state-of-the-nation address in July she boasted that
the economy had been growing for 22 consecutive quarters and gave credit to
her administration’s reforms, including the enactment of additional corporate,
excise, and value-added taxes. The tax measures, passed by Congress in 2005
and 2006, meant additional revenues that plugged the fiscal deficit and made
the country more attractive to investors.
In the first seven months of 2006, the Philippines netted nearly $1.2 billion
in foreign direct investments, a 60% increase from the same period the previous
year. Many of the new investments were made in energy and mining after
a Supreme Court decision opened these sectors to foreigners. The stock mar-
ket reached record highs, comparable to the boom years before the 1997–98
Asian financial crisis. Remittances by some eight million Filipinos overseas are