MANILA, Philippines -- (UPDATE) Amid continuing calls to lower or scrap the value added tax to ease the burden of the continued escalation of fuel and food prices, President Gloria Macapagal-Arroyo on Monday maintained that her administration's fiscal measures are the best shield against the current crisis.

And she said the reforms she has instituted will benefit her successor after 2010, who will inherit a “more stable economy” when Arroyo steps down after nine years in office.

Without the tax measures, she said the country would now be reeling even more from the effects of the global food and fuel crisis.

"...for whatever challenge a wayward world economy may throw us, and because we have been prepared for it, we have been able to shield our nation from the worst effects of food and fuel crisis worldwide,” Arroyo told delegates of the 4th Ambassadors/Consul Generals and Tourism Directors Tour in Malacañang.

“Had we acted differently or not acted at all, all would be lost today,” she said. “So we remain committed to the path we have taken, the best solution is the one that has worked."

"We remain on track and firmly focused on getting the country well on the way by 2010 to the first world that we will enjoy in 20 years,” she said. “We are sticking to it and we are widening the fiscal reforms that have earned us the respect of international finance, bringing our interest rates down and making our pesos stronger.”

“We shall plant them [reforms] deeper in the structures of government in the economy all for the benefit not only of our people tomorrow but the next president as well," Arroyo said.

The soaring prices of food and oil have prompted several lawmakers, militant groups, and the Catholic Bishops Conference of the Philippines (CBCP) to ask for a review of the expanded VAT law with an eye towards reducing or scrapping the current 12-percent VAT.

But Malacañang has been lukewarm to the calls and instead announced plans to continue spending excess revenues from the VAT on oil on cash subsidies, upgrading of public hospitals, and rehabilitation of typhoon-ravaged areas.

The Department of Budget earlier said the windfall from the VAT on oil for the second quarter of the year could be anywhere between P4-5 billion.

Arroyo said the VAT, although "hard on the people [and] unpopular with big business," is good for the country" because it gave the government more money to build bridges, roads, ports, and other infrastructure.”

She added that the economic reforms she has initiated have earned the confidence of the international finance community and helped boost the peso and the stock market.

"With the rapid rise in food and fuel prices...the Philippines must take greater control of its own destiny, we must become more self-reliant and self-sufficient. We are in uncharted waters that we must navigate in a new and uncertain era," she said.

Arroyo thanked Filipinos in the United States and Canada for putting in investing their money in the country in small and medium enterprise, the real estate market, and the stock market.

"You are a crucial part of Team Philippines. We encourage you to continue championing Phil initiatives aimed at lasting peace and development. On our part, in the Philippines, we continue to build bridges and neighbors, and strengthen ties with allies around the world, especially America, that is why your tour is important," she said.