Dominguez calls for balancing act
Between health and economic concerns
The Department of Finance (DOF) said the government needs to strike a balance between safeguarding public health and restarting the economy as the country continues to grapple with the coronavirus pandemic.
Finance Secretary Carlos G. Dominguez III said that while the people’s health and safety remain the government’s top priority, Filipinos cannot keep retreating from the virus at the cost of their livelihoods.
“It is vital that these regions reopen. The reality is that this virus will not go away until a vaccine is found. In the meantime, we must get back to work while staying safe,” Dominguez said during the preState of the Nation Address (SONA) forum yesterday.
But Dominguez stressed that the government “will never” take the threat posed by the coronavirus disease 2019 (COVID-19) pandemic lightly, as it must continue protecting lives in ways that do not prevent people from earning a living.
“This is a tough decision to make but we need to do this. Revving up the economy essentially means raising consumer and investor confidence, which requires some functional level of interaction among groups and individuals,” Dominguez said.
“We are asking all Filipinos to cultivate in themselves a renewed sense of confidence through continued vigilance–not out of fear, but with the knowledge that most factors of viral transmission are under our personal control,” he added.
Dominguez said the government remains fully committed to implementing the “Build, Build, Build” infrastructure program with more projects focused in the areas of health, education, housing, and water and sanitation.
It is likewise pursuing bold fiscal and economic reform measures, such as the remaining packages of the Comprehensive Tax Reform Program (CTRP), and the amendments to the Foreign Investments Act, the Retail Trade Liberalization Act, and the Public Service Act.
“Be assured that the Duterte administration will protect our economic gains, support our recovery, strengthen our resilience, and bring us back to the path of inclusive and shared prosperity. This crisis will not diminish our willingness to exercise decisive leadership,” Dominguez said.
“By working together, we will beat this pandemic and come out even stronger than ever,” he added.
He noted that President Duterte’s early and decisive actions to combat COVID-19 slowed down the spread of the virus instead of allowing it to grow exponentially faster and gave the government time to expand its testing capacity from just around 300 actual tests per day in March to 18,141 average daily tests at the start of this month.
As an indicator for whether a country is doing enough tests, the World Health Organization has set a 10 percent positive rate as the benchmark. The Philippines meets this measure, with only 7.4 percent of tests yielding a positive result, Dominguez noted.
Meanwhile, Bangko Sentral ng Pilipinas (BSP) Governor Benjamin E. Diokno remains confident of BSP’s flexible monetary space to adjust both credit and liquidity conditions as needed while he also assures the banking public that borrowers will have reprieves.
In Diokno’s pre-SONA presentation on Wednesday with the other Duterte economic team, he addressed the concerns of bank loans and its payments as the lockdowns are being slowly eased.
He said banks are “active in extending financial relief to their customers through loan renewals and restructuring arrangements” and they are able to do this as an extension of several and widereaching regulatory relief measures BSP granted to financial institutions since March.
“These measures,” said Diokno, “complement earlier monetary actions taken by the BSP to shore up market confidence and cushion domestic economic activity, along with various time-bound relaxation of various regulations (calculation of penalties on required reserves and single borrower limits, among others).”
Diokno said the domestic banking system is stable and continues to be a source of strength for the economy. As of end-April 2020, the industry continues to have low exposure to bad debts with big banks’ non-performing loans ratio of 1.9 percent and non-performing assets ratio of 1.6 percent.