Finance Secretary Carlos G. Dominguez III urged local business owners to work on ways to regain the strength of consumer sentiment shattered by the uncertainty spawned by the COVID-19 pandemic.
Speaking at a recent webinar hosted by the Iloilo Business Club (IBC), Dominguez said the challenge facing the country’s economy today is how to instill confidence in consumers in the wake of the COVID-19 outbreak.
As lifting of government’s movement restrictions alone will not automatically bring consumer confidence back, Dominguez said it is crucial for businesses to help their customers feel safe and secure once they decide to return to their establishments.
“Our real problem right now with this COVID-19 is how to give people the confidence that if they go out and they start their regular activities or go back to work, they are not going to get infected or if they get infected, there is a way of curing it,” Dominguez said.
The revival of consumer confidence is central to the recovery of the Philippine economy, as the nation’s growth has historically been driven mainly by consumption, with households contributing more than two-thirds of aggregate expenditures.
“COVID-19 destroyed the aggregate demand in the Philippines because people just couldn’t move around and because they are scared to get sick, they're worried about their jobs, they are not spending so much,” Dominguez explained.
The crisis in consumer confidence is really the problem in the local economy, the finance chief said.
A recent Bangko Sentral ng Pilipinas consumer expectations survey revealed that the consumer confidence index plunged to a record low of minus 54.5 percent in the third quarter, the lowest since the start of the nationwide survey in the first quarter of 2007.
Related Story: Business, consumer confidence falls in Q3, seen negative in Q4 – BSP survey
“It’s important for us to start encouraging people to be confident that spending is okay,” Dominguez said.
For instance, Dominguez suggested that mall and hotel owners in Iloilo should reassure consumers that health and safety measures are in place in their premises.
“For the mall owners for instance, I would suggest that you come out with a public information campaign telling the people that they are going to be safe in the mall. That they take your temperature, that everybody wears a mask, that your chances of getting infected are very small,” Dominguez said.
While for hotel operators, Dominguez said “you can start opening up for staycations. You know, people don’t wanna travel outside Iloilo so let’s talk to your local governments and open your local hotels so that people can do a vacation in a hotel.”
Related story: Hotels, resorts happy over start of ‘staycation’
“Let’s create a bubble of confidence in Iloilo so that people can resume their regular lives and resume their jobs. So that, I think, is what the local business can do in your area,” he added.
Dominguez said that Iloilo, being an agriculturally productive area, needs to keep its focus on this industry.
“Agriculture is a very inelastic demand. People are gonna eat—the more you produce there and the more you make available for people to consume, the better for the local economy,” Dominguez said.
“That is an area that the local governments—who actually have the responsibility for agricultural production—should focus on,” he added.
Dominguez assured the Iloilo business community that President Duterte is committed to pursuing his “Build, Build, Build” initiative despite the global coronavirus pandemic.