Reheating the economy, all roads to normalcy

Published March 24, 2021, 5:00 AM

by Ted Estacio

Re-start. re-charge, re-heat! The new hype of the country’s economic managers as they focus on the re- opening of most businesses to start reheating the economy.

We should understand though that to be able to re-start the economy it needs two vital conditions – presence of capital and regular consumption of customers.

 Many establishments, like those in the manufacturing sector, transportationand those in the trading sector cannot just open unless they have adequate capital to rehire the people that they need in their operations, pay the spaces that they use and buy raw materials to replenish their stocks.

Most MSMEs , the most hardly hit sector, are actually needing fresh capital, to open and operate their businesses. In many countries, like the US, Indonesia and Singapore, aids and grants are provided this sector to enable them to re-charge their operations.

Consumption, the next essential element to be able to justify the opening of some sectors has to be consistent, regular and enough to prompt suppliers and those in the manufacturing sector to recharge their re-openings.

People have to spend. They have to patronize their favorite restaurants, buy from large groceries, visit their “palangkes”(markets), they have to resume buying their medicines, complete small repairs and home improvements, they have to start home cooking so they need to buy their meat, fish and seafoods and the vegies again from their favorite groceries. But this all depends if they have adequate savings to spend.

To support these activities, soft and easy to obtain business loans must be available not only from commercial banks and rural banks but from cooperatives and NGOs engaged in micro lending. Better if Bangko Sentral can establish a new bank simply for rehabilitating existing commercial and small enterprises just like after the war.

Government agencies with special funds appropriated to help small time businesses, should help in extending their funds to those in need.

If raw materials needed have to be imported, government assistance must be present to effect this.

Employees that are re-employed must consume but expect small expenditures at the beginning. Spending as much as they do before lockdowns were imposed would need time as going out and enjoying again their mall trips are done with caution.

With limited traffic and circulation of customers, not all open establishment could expect to receive again their streams of income. Businesses need again to fund initially their operations like rental, salaries and stock replenishments ,

[email protected]