In a recent interview with the Philippines' "economist-in-chief," New York-based think tank, GlobalSource Partners, asked President Gloria Macapagal-Arroyo about her economic legacy, where she thinks the Philippine economy is headed, and what she believes is needed for the country to achieve East Asian growth.

Excerpts of the brief exchange below:

GlobalSource (GS): How would you grade yourself as president, say in a scale of 1 to 5 as in the state university’s grading system (1 being the highest)?

President Gloria Macapagal-Arroyo (PGMA): The issue is performance and results. I leave the grading for others to judge. I set out to get our economy moving again, regain control over the fiscal insanity that had preceded my administration, and invest in the people for the first time in a generation. By any measure, our economy has performed better than at any period in the Philippines in over 30 years – peaking at almost 8% growth in 2007 before the global recession.

The game changer that I still hope will happen is comprehensive peace in Mindanao. If left undone, this will keep our nation back.

GS: Some critics have given you a failing mark based on the promises you made in past State of the Nation Addresses, especially in terms of job creation, education for all, and healing the political wounds of EDSA 2. Do you think this is a fair assessment?

PGMA: The critics are wrong. The results of our economic reform program speak for themselves. According to the National Statistics Office, as of 2008, we had created more than 8 million jobs since the start of this administration, putting our target of creating 10 million jobs by 2010 well within reach. That is a substantial result and that’s not all. We have also achieved 35 consecutive quarters of economic growth since 2001, stabilized inflation, strengthened our currency, and increased access to education through investments in schools, classrooms and textbooks. We are also resuming peace talks with the Moro Islamic Liberation Front (MILF) in Malaysia and are moving closer towards peace in Mindanao. These are signs of success. No matter how the opposition chooses to characterize them.

GS: What do you think are your key legacies in terms of steering the Philippine economy forward in the new millennium?

PGMA: One, the sheer momentum of economic growth on my watch: 35 straight quarters of growth, unprecedented, capped by continued positive growth even through the depths of the worst global recession in decades. Two, the fiscal reforms I instituted early on my watch capped by the expanded VAT (EVAT), which brought down our deficit ratios, earned us multiple ratings upgrades, and funded economic stimulus and social safety nets against the worst of the global recession.

Three, the infrastructure that we have been able to invest in with the additional resources generated by our fiscal reforms, including physical infrastructures of roads, bridges, seaports and airports, which have brought down our national cost basis especially in food and have led to permanently higher efficiencies in transport and distribution. It also includes virtual infrastructures such as investment in education and the digital infrastructure in the ICT sector, which are contributing to the success of the BPO and O&O industries.

And four, the international advocacy I have pursued on behalf of our millions of overseas Filipino workers as well as our country’s leadership in the discussion of such global and regional issues as the rebuilding of the global financial system, regional economic integration, and climate change. Aggressively marketing and looking after our OFWs is an unparalleled investment in our human capital as well as our global market presence.

GS: For financial market players, the most important achievement of your administration would probably be the improvement in the fiscal situation (via the VAT law, primarily) which had threatened to snowball into a crisis in 2004. But there has been amazing growth in the national deficit this year, in large part due to structural factors (e.g. recurring tax losses). Do you think the fiscal legacy is now at risk?

PGMA: The global recession has clearly challenged our fiscal position, but the alternative to deficit spending to keep the economy going would have been to let our people suffer, particularly the poor. I would not let that happen. Times are too tough as it is with a global recession to abandon the poor at a time when they need the most help. Our fiscal reforms, in particular the passage of the EVAT law, are indeed major achievements of this administration and in fact they continue to deliver significant benefits to our country today. The additional resources that we are generating through those reforms are enabling us to make critical investments in infrastructure and social services, and more importantly, they are supporting our economy throughout the global economic crisis and the rehabilitation efforts in Luzon as we rebuild many parts of the region that were affected by the typhoons earlier this year.

Yes, our budget deficit has risen this year as a result of our economic stimulus measures and the devastation from the typhoons, but it remains within reasonable levels given the internal and external challenges our country is facing. What is important is that because of the prudent fiscal management of our government, by next year, we will be able to bring our deficit reduction program back on track to achieve a balanced budget by 2013. I am confident that we are on the right track to continue putting our fiscal house in order.

GS: What do you think is needed to further raise the potential growth rate of the country to a level at par with its East Asian neighbors? Name three short- to medium-term goals.

PGMA: First of all, we must continue to improve rural employment and incomes through initiatives that enhance agricultural productivity, for instance irrigation systems, road infrastructure, and extension training; reforms in the land reform regime that will allow farmers to leverage and liquefy their newly acquired land assets; financing and capacity building for rural small- and medium-scale enterprises that create non-farm livelihood opportunities; and other similar measures that will promote positive terms of trade and trade balances, both domestically and internationally, in agriculture.

Secondly, we must continue to root out corruption especially in the economic and fiscal governance areas – an age-old problem that has also been identified by foreign investors as a disincentive. We have been making slow but steady progress in meeting the Millennium Challenge Corp. (MCC) corruption indicator. This year we would have qualified for “compact” status if we had remained in our former peer group of low-income countries. However, we advanced to the low middle-income category as a result of the economic progress we have been making, which is cause for celebration but that also means we are now being held to higher governance standards, so we must continue to raise the bar for ourselves if we want to move to the next level as well in the MCC corruption indicator. Economic growth in and of itself is in fact the best corruption buster, so I am confident that as long as we move our economy forward, we will make new headway in fighting corruption.

And third, we must institute more effective and sustained population management programs that remain consistent with the core values of our dominant Catholic faith as a nation.

We have come a long way to where our economy stands today. I am confident in the ability of the Philippines to catch up with our neighbors in the region.