The looming US war on Iraq will have a disastrous effect on the Philippine economy.

The Philippine government announced Thursday the country's gross domestic product (GDP) grew by 4.6 percent in 2002, the highest since the 1997 Asian financial crisis, exceeding forecasts of the government itself of 4 percent to 4.5 percent.

The growth is good news by most standards and could lift the morale of Filipinos. However, the possible war in Iraq is certain to disrupt the momentum of a sustainable economic growth.

The immediate impacts of a war include an oil price shock; the mass evacuation of many of the 1.6 million Filipino overseas workers in the Middle East, resulting in the contraction of foreign exchange remittances that keep the economy afloat during economic downturns; and the possible flare-up of terrorist attacks in sympathetic response to an attack on Iraq, although such attacks may not necessarily be coordinated with Iraq's war effort, analysts said.

In the current Iraq crisis, oil supply has been aggravated by the cut in oil production by Venezuela, which was rocked by a political crisis threatening to topple the government of President Hugo Chavez.

The trip of Philippine President Gloria Macapagal-Arroyo to Kuwait to demonstrate her concern for the 1.6 million Filipino overseas workers in the Middle East underlined the grave threat facing Filipinos there. The jobs of those Filipinos would be put at risk in a war that may run longer than the best-case scenarios.

On the home front, there are signals of unrest from the Islamic community. A recent anti-war rally, joined mainly by Filipino Muslims, has warned that an invasion of Iraq would provoke terrorist attacks in solidarity with Iraq along the religious line and in protest of the Philippine administration's support for US President George W. Bush's sabre-rattling policy on Iraq, local media reported.

Meanwhile, the results of a national poll conducted by the Social Weather Stations from Nov. 15 to Dec. 2, 2002 showed 71 percent responders believed the Philippine economy would be worse if the US war on Iraq erupted.

And 72 percent said there would be greater danger of terrorist attacks in the Philippines if the country supported the US in a military action against Iraq, for example by allowing American forces to pass through the Philippines.

(Xinhua News Agency February 3, 2003)