The economic bounce-back will be anchored on the Philippines’ ability to reopen as safely as possible together with a slew of pump-priming measures buttressed by the government’s strong fiscal position, the Duterte administration’s chief economic manager said.
Finance Secretary Carlos G. Dominguez III, said he expects the “additional improvements” seen in the final three-months of last year will be sustained in 2021 as businesses reopened and access to mass transportation increased.
“We expect to see additional improvements in the last quarter of 2020 as we have been progressively reopening businesses and accessibility to mass transportation,” Dominguez said.
To recall, the strict community quarantine measures last year cost Metro Manila and its adjacent regions some P2.1 billion in wages daily, while the gradual easing restrictions to general community quarantine still led to wage losses of P700 million every day.
With Metro Manila and nearby provinces under general community quarantine (GCQ), the economic contraction of 16.9 percent and the unemployment rate of 17.7 percent in the second quarter eased to 11.5 percent and 8.7 percent, respectively.
“To be completely honest, some of the jobs lost may never return. The pandemic, however, provided us with the opportunity to accelerate our shift to digitalization in order to meet the demands of the emerging new economy,” Dominguez said.
“This will create new jobs that will require new skills,” he added.
Meanwhile, the timely enactment of the P4.506 trillion national budget, along with the extension of the validity of Bayanihan 2 and the 2020 appropriations, will also provide the government sufficient means to hasten the recovery of the economy, Dominguez said.
He also noted that the several legislative measures will further power the country’s economic recovery this year, including the Financial Institutions Strategic Transfer (FIST) bill and the Corporate Recovery and Tax Incentives for Enterprises Act (CREATE) bill.
Dominguez explained that FIST will allow banks to offload their souring loans and assets through asset management companies so they can extend more credit to pandemic-hit businesses in need of assistance.
The CREATE, on the other hand, will provide enterprises with the largest economic stimulus package in the country’s history by way of significant corporate income tax (CIT) cuts and better fiscal incentives.
The FIST bill is now awaiting the President’s signatures, while CREATE is expected to be swiftly approved by the Congress when it resumes session this week.
Another economic stimulus measure, namely the Government Financial Institutions Unified Initiatives to Distressed Enterprises for Economic Recovery (GUIDE) bill, will also support the country’s recovery, Dominguez said.
GUIDE aims to form a special holding company to enable government financial institutions to infuse equity, under strict conditions, to strategically important companies facing solvency issues.