All countries in the world are struggling to keep their economies afloat amidst the crisis. Each one has different strategies and ways to beat the crisis just to remain afloat or even to start a long process of recovery.
Here in the Philippines, the "Bayanihan to Heal as One Act", introduced in April, allows the President to "reallocate, realign, and reprogram" a budget of almost P275 billion ($5.37 billion) from the estimated $8.55 billion national budget approved for 2020, in response to the pandemic. The act also enables him to "temporarily take over or direct the operations" of public utilities and privately-owned health facilities and other necessary facilities "when the public interest so requires" (source: UNODC/southeastasianandpacific).
So, it is interesting to know how other countries are doing to survive and how effective are their strategies.
The United States although having the most number of COVID19 cases was being lauded for moving decisively to stabilize financial markets through what they call their ‘CARES ACT”. For instance, to assist their small and mid-sized businesses (i.e. between 500 and 10,000 employees) direct loans are granted at no higher than 2 percent, and with no amortization due on the loans for at least the first six months. If payroll costs and no more than 25% to utilities ( such as interest payment on mortgages, rent payment and utility which were all incurred or services began before 2.15.20) is equal to the amount of the loan, the business does not even have to pay after 6 months. This is to make sure that businesses can continue with their operations and their employees continued to be paid (source: Shearman.com/perspective dated April 27, 2020).
Japan had the largest fiscal stimulus package among all G20 countries in terms of percentage of gross domestic product (GDP) which is at 21.2 percent(source: statista.com). Their measures does not only include cash payments to citizens but also to small and midsize businesses, interest-free loans, delayed tax payments and travel and tourism coupons (cfr.org).
For Southeast Asian countries, a United Nations Office of Drugs and Crime (UNODC) questionnaire compiled by experts and practitioners in the region during the first two weeks of May 2020 as well as on desk-based research of emergency laws, Covid-19 regulations and media reactions showed all surveyed countries adopted Covid-19 emergency support packages and also used cash payments and grants as support measures while most countries offered tax rebates and loans. While Individuals received support in all surveyed countries, Small and Medium-sized Enterprises were supported in eight countries, followed by large businesses in six countries. This is the latest I came across but they may not be up-to-date this August since governments maybe revising in an on-going basis to respond to the Covid-19 crisis.
The study covers Cambodia, Indonesia, Lao PDR, Malaysia, Myanmar, Philippines, Singapore, Thailand, Timor-Leste and Viet Nam. However, it was observed that because these emergency packages may have been adopted and implemented without the necessary oversight procedures and mechanisms, it increases the risks of misuse, fraud and corruption in the implementation of the packages (source: https://www.unodc.org/southeastasiaandpacific).
From these statistics, we can see how each government adapted different economic packages. Although not shown here, they also have different ways of monitoring the implementation of these funds. The government maybe disbursing trillions of money into the system but without effective monitoring, the whole country will continue to suffer the debilitating effects of this pandemic. Two important major areas should be addressed – health of the people and the economy. The government cannot be forever on the dole outs of money to individuals, the funds cannot sustain it. Businesses should be supported too, for this will give food on the table in the long run and help keep the economy afloat while the vaccines are still being tested.
Large malls like Ayala, SM and Robinsons had greatly helped sustain the businesses by providing generous discounts to their tenants even if these discounts will also dampen their bottom-line. We are a consumer-driven economy and without the help of these businesses to replace what the government lacks, we will likely face a huge economic downturn since consumer spending accounts for 66% of the country’s GDP (source: financeasia.com dated 2.23.20 “Consumers hold the key…”).
Hopefully, our government is taking a look and benchmark against other country’s’ responses to this crisis and adapt the best practices up to the extent of what it can afford. For us citizens let us do our best, although oftentimes we maybe helpless as we watch the increase of the COVID19 cases and the shrinking of our economy, to do what we can in our own small way to mitigate the severe effects of this crisis. Observing protocols like social distancing, hand washing, supporting businesses whatever we can afford, etc…may not be that much, but collectively can go a long way in helping alleviate the disastrous effect this crisis can bring - both to the physical health, social and economic condition of our country.
(Wilma Miranda is a Managing Partner of Inventor, Miranda & Associates, CPAs, Chair of the Media Affairs Committee of FINEX, Treasurer of Negros Outsourcing Services, Inc. and member of the Board of Directors of KPS Outsourcing, Inc. The views expressed herein do not necessarily reflect the opinion of these institutions.)