Economic managers: We will overcome this crisis
Members of the administration’s economic team yesterday expressed confidence that the Philippines will overcome the health and economic crisis brought about by the coronavirus disease 2019 or COVID-19 pandemic.
President Duterte, in a preState of the Nation Address (SONA) briefing, had a similar message, saying his administration has always overcome trials in the past four years.
The head of the economic team, Finance Secretary Carlos Dominguez III, said the economy would be able to bounce back.
“We will overcome this crisis. We will get back to work. We will get back our economy and you can be assured that this government is doing its utmost to bring the economy back to the growth path,” Dominguez said at the preSONA virtual press briefing.
“It’s true we are having a hiccup, we are having a bad spot, but we are strong enough to weather this problem and come out of it probably even stronger than before,” Dominguez added.
Bangko Sentral ng Pilipinas (BSP) Governor Benjamin Diokno, acting Socioeconomic Planning Secretary Karl Chua and Public Works Secretary Mark Villar expressed the same confidence that the country would hurdle the challenges posed by the pandemic.
The Philippine economy contracted by 0.2 percent in
the first quarter of the year, the first quarterly economic downturn in two decades.
Diokno said earlier a deeper economic contraction looms in the second quarter, with the gross domestic product (GDP) likely shrinking by 5.7 to 6.7 percent. But he said the country is in a good position for recovery.
For 2020, the Development Budget Coordination Committee (DBCC) expects the economy to contract by two to 3.4 percent. However, they also see a sharp recovery in 2021, projecting a GDP growth of 7.1 to 8.1 percent.
In a speech during the preSONA forum, the finance chief noted that signs of economic recovery “are emerging.”
For one, he said the Bureau of Customs (BOC) was able to collect P42.54 billion in June, 4.4 percent higher than its revised collection target of P40.74 billion due to higher import volume.
“This signals rising economic activity,” he said.
Furthermore, he said recovery is also seen in the manufacturing sector, as the economy slowly reopens.
Citing the Philippine Statistics Authority in its Monthly Integrated Survey of Selected Industries, he said the capacity utilization of factories increased to 73.4 percent in May compared to 71.2 percent in April.
He also mentioned that while the Volume of Production Index of Manufacturing is 40.3 percent down year-onyear last May, this showed an improvement from the 43.6 percent contraction last April.
“The latest result of Purchasing Managers’ Index also points to an improved manufacturing performance moving forward, as it rolls from 40.1 in May to 49.7 in June,” he added.
Meanwhile, Dominguez reiterated his proposal to ease the movement restrictions in Metro Manila and the Calabarzon region to help revive the economy.
“Metro Manila and Calabarzon account for 67 percent of the country’s economy. 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.
He said there is a need to “strike a reasonable balance between safeguarding public health and restarting our economy.”
“Health and livelihood is not a binary choice. We must protect lives in ways that do not prevent us from earning a living. This is a tough decision to make but we need to do this,” the DOF chief added.
“Revving up the economy essentially means raising consumer and investor confidence, which requires some functional level of interaction among groups and individuals. 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.”
The finance chief also highlighted the legislative measures needed to help the economy bounce back from the impact of the health crisis, which include the Corporate Recovery and Tax Incentives for Enterprises Act (CITIRA).
Dominguez said the government will also maintain its “Build, Build, Build” program as infrastructure projects are the “best way” to revive the economy, given their high multiplier effect.
Build, Build, Build
Duterte touted his administration’s accomplishments anchored on aggressive tax measures and the massive infrastructure project under the
“Build, Build, Build” program.
“The accomplishments that we have just presented to you in the pre-SONA forum are the fruits of our collective efforts to foster real, lasting and meaningful change in our country,” Duterte said in a taped message aired at the end of the pre-SONA activity at the Philippine Information Agency auditorium in Quezon City yesterday.
“Numerous trials have tested our resolve these past few years but we always emerged victorious because of our unity and bayanihan as a people,” he said.
Secretary to the Cabinet Karlo Nograles said the administration will be relentless in pursuing its economic objectives in the wake of the current pandemic.
“We may live in an extraordinary milieu, but the goal of the SONA and these complementary pre-SONAs remains the same: to provide you, the public, with a clear picture of how we plan to make your lives better,” he said.
The Economic Development Cluster has underscored the need to provide a conducive environment to promote rapid, inclusive and sustained economic growth in the country, and provided information on the implementation of programs involving economic growth and job creation.
At the opening of the forum, Executive Secretary Salvador Medialdea said the President is ready to present his administration’s accomplishments, including its pandemic response and updates on priority programs.
“The President’s priority is clear – to save lives and protect communities,” he added.
Preventing millions
Government measures, including the community lockdown imposed in different parts of the country, saved 1.3 million to 3.5 million Filipinos from getting coronavirus infections, the DOF said yesterday.
Dominguez described the COVID-19 pandemic as a “black swan” event which no one was prepared for.
Despite this, he said the government “did not fold and run in the face of an unprecedented crisis,” quickly taking measures to combat the contagion to save lives.
“According to the Epidemiological Models by the FASSSTER Project in April and the University of the Philippines COVID-19 Pandemic Response Team as of June 27, government interventions such as the lockdown have prevented as much as 1.3 to 3.5 million infections,” Dominguez said.
Last March, Duterte placed the entire Luzon region under enhanced community quarantine to contain the spread of COVID-19.
Malacañang, meanwhile, has decided to change its communication strategy in delivering news and information about the Philippines’ plan of action against the coronavirus disease after statistics showed a drastic increase in positive cases in the past weeks.
During a meeting between Duterte and members of the Cabinet on Tuesday night in Davao City, presidential spokesman Harry Roque Jr. said his team will promote how the government has improved the healthcare capacity in the last few months while the country reopens the economy.
Instead of reporting the rapid increase in the number of positive cases, Roque said the emphasis should be given on the low mortality rate and that there are lesser critical care cases.
The Philippine government is also able to strengthen its healthcare capacity.
“So, while we are reopening the economy, we want to strengthen T3 – which is testing, tracing and treatment. We will provide protection for the vulnerables because we also learned that from other countries,” the Palace official added.