Despite encouraging prospects for the local economy, the Duterte administration’s chief economic manger admitted that it would take more years before the Philippines can fully recover from the 2020 coronavirus pandemic.
Speaking at the Economic Forum hosted by the Manila Times on Friday, Feb. 26, Finance Secretary Carlos G. Dominguez III said the country cannot recover all that it had lost last year in “just one blow,” or in 2021 alone.
While the economic team expects a strong gross domestic product growth of 6.5 percent to 7.5 percent in 2021, Dominguez said “it will take us more years to nurse our economy to where it was before the pandemic struck.”
“However, the prospects for 2021 are encouraging,” Dominguez said, noting that “we have gone through the worst episodes of this pandemic.”
Now that medical science knows more about the virus, coupled with the carefully studied public health protocols and availability of the COVID-19 vaccine, Dominguez said “we are ready to reopen the economy.”
Meanwhile, Dominguez said the ratification of two recovery measures would provide the private sector with the stimulus it needs to bounce back from the economic shock of the COVID-19 pandemic.
These two measures are the Corporate Recovery and Tax Incentives for Enterprises Act (CREATE), and the Financial Institutions Strategic Transfer (FIST) law.
The finance chief noted that the revival of private enterprises and consumer activity is crucial in propelling the country to a sustainable recovery starting this year.
But Dominguez added that the government also needs to step up in implementing its “Build, Build, Build” program, given that a large part of the 2021 national budget has been earmarked for infrastructure modernization.
The stimulus measures being carried out by the government for the private sector to reenergize the economy is the more sustainable way for the country to recover from the pandemic, Dominguez said.
“The present economic downturn cannot be fully confronted by throwing subsidies at everything in sight. This would only fuel inflation without driving expansion. It will bring us to a debt crisis farther down the road,” Dominguez said.
“The more sustainable path to recovery is to foster the revival of our enterprises and the restoration of consumer activity. A strong private sector is the key to our recovery strategy,” he added.
Dominguez said the Philippines’ recovery will also hinge on developments in the global economy, which, if it remains sluggish, would pose headwinds to the country’s growth.
“Because of this, we have supported all efforts at building international solidarity both to defeat the virus and to revive the global economy. We are looking forward to all diplomatic initiatives to support a strong global economic recovery,” he said.