PCCI urges passage of economic stimulus
The contraction of the gross domestic product by 16.2 percent in the second quarter this year percent should be a wake-up call for the government to accelerate the passage of stimulus measures and the full reopening of business activities to avert the economic recession, the Philippine Chamber of Commerce and Industry (PCCI) said.
“That we will go into a recession is no longer surprising. I had advised our members not to expect the second, and maybe even the third quarter numbers to be better unless government acts fast to adopt and implement stimulus packages and allow the full resumption of economic activities,” said PCCI President Amb. Benedicto Yujuico.
According to Yujuico, businesses will need substantial fiscal and non-fiscal support to survive and fully recover. Companies have a hard time planning on their next move.
“We are struggling with our projections. We cannot do even medium-term planning because of COVID-19’s unpredictability. This situation could persist until such time that a vaccine becomes readily available. And we are looking at 2021 for this,” Yujuico explained.
Smaller enterprises, Yujuico added, are already having cash flow and liquidity issues having to pay taxes, compounded rents, loans and interest charges, utilities and manpower, with negative returns.
Taking out loans may not even be an option anymore for these enterprises. “They are wary because it could lead to bigger loans,” Yujuico explained.
To help business and save jobs, the PCCI continued to bat for the P1.3 trillion ARISE bill or the Accelerated Recovery and Investments Stimulus for the Economy on top of the P140-billion Bayanihan to Recover as One Act.
Yujuico noted that neighboring countries in the region whose economies have performed better than the Philippines’ own have allocated bigger budgets.
Indonesia, whose second quarter GDP decelerated by 5.32 percent has a stimulus package amounting to $47.6 billion, Thailand at $59.7 billion and Vietnam, whose GDP fell at 0.36 percent and which most investors relocating from China are eyeing, has approved $7.6 billion.
Pointing out that extending the lockdown could worsen the woes of business from which they many never be able to recover even with fiscal support, Yujuico again urged for the full resumption of economic activities.