Economic recovery depends on health system — DOF

The Philippines’ economic recovery story will mainly depend on how the nation’s health system will manage the risks posed by the coronavirus disease (COVID-19), the Department of Finance (DOF) said yesterday.

In a DOF economy bulletin, the department explained that the economic slump this year is a pandemic-induced crisis, noting the gross domestic product (GDP) contraction is just “a collateral damage” of the COVID-19.

“The ongoing COVID-19 is, first and foremost, a health issue,” the DOF’s study prepared by Finance Undersecretary Gil S. Beltran read, pointing that restrictions of movements and physical distancing are required prevent its further spread.

“However, [it] inevitably made the economy a collateral damage,” the department said.

For this reason, DOF aid that restoring growth from the expected 2.0 percent to 3.4 percent slump this year will depend,“to a great extent,” on the country’s ability to meet the capacity required to manage the public health crisis.

“Such capacity could tilt the odds in what is apparently a life-versuslivelihood dilemma and make it more of a life-and-livelihood dual outcome, but probably at a lesser scale than before under a “new normal” should there still be uncertainties about the virus,” DOF said.

Aside from capacity,

DOF has also expressed its concern on the approaching rainy season in the second-half of the year as it will make the country’s to battle against COVID-19 “more challenging.”

“The flu season will have started and flooding could occur in lowlying areas. Distancing in temporary relocation sites could be difficult to implement [during the raining season],” DOF said.

From the fiscal side, Finance Secretary Carlos G. Dominguez III said they have array of recovery measures, plus fundamental reforms it has put in place to keep the economy resilient, to put the country back on its positive growth trajectory. Dominguez also expressed confidence that the Philippines can bounce back from the unprecedented health crisis spawned by COVID-19 given the government’s “prudent approach to fiscal management” in recent years.

The President’s conservative economic policies have also provided the government with the fiscal space it needs to fund cash-intensive programs that will help the economy and the people hurdle the current crisis, the finance chief said.