The impact of the economic crisis resulting from the coronavirus pandemic worsened by the Delta variant would be with us for years before any signs of recovery could be seen on the horizon.
No less than the International Monetary Fund has affirmed that the current recession sparked by the pandemic is a “crisis like no other” and is much worse than the 2008 global financial crisis.
“Never in the history of the IMF have we witnessed the world economy coming to a standstill,” IMF managing director Kristalina Georgieva said on April last year. And more than a year has passed since the IMF’s grim assessment and it appears the bleak situation has even worsened with the onslaught of more coronavirus mutations like the highly transmissible Delta variant which sparked more new Covid-19 cases in the Philippines.
With our economy plunging deeper into recession amid the health crisis hitting our country currently with more than 20,000 daily new cases, Filipinos suffering terribly have become desperate for answers on how and when the end of our economic hardships would finally come.
Our country’s debt has already reached around P11.6 trillion and above P2 trillion more will have to be borrowed this year alone to fund the Philippines’ pandemic response.
Recovering from a 9.6 percent plunge in our GDP last year – the steepest contraction for the Philippines since World War II – would certainly not be easy. Some economic experts say that putting our economy back to the pre-pandemic level could even take as much as five years.
But listening to former Bangko Sentral ng Pilipinas deputy governor Diwa Gunigundo who was online guest in my Teleradyo program Sagot Ko ‘Yan last Sunday, economic recovery could be possibly achieved in just about two years.
He said that our country needs to “grow out of debt” and the ability to do so has been proven in the past when we achieved continuous economic growth for two decades.
Growing out of debt means that there must be ways by which the need for government to borrow more funds is substantially reduced. And among the ways to do so is to conduct an inventory of all unspent money in all government agencies and use such money to augment funds for pandemic response.
Mr. Gunigundo also cited the need to reassess priorities at this time of the pandemic, reduce funds of agencies if needed, and realign the funds to be spent on necessary expenditures to alleviate the health crisis.
He said there must be no leakages in the use of much need funds. In other words, the need to “spend, spend, spend” on priorities ought to be followed while ensuring that funds are not pocketed or lost to inefficiency or malfeasance.
Mr. Gunigundo also cited the need to address decisively our pandemic response, and to go into granular lockdowns instead of general lockdowns. He also stressed it is essential for all Filipinos to unite and cooperate in battling the pandemic by faithfully observing health protocols and paying proper taxes to help government meet its expenditure requirements.
Of course, it is incumbent upon government to spend funds with utmost diligence and to heed the IMF’s call for countries “to prioritize health expenditures and to make sure doctors, nurses and other health workers are paid.” Indeed, if Filipinos fully cooperate and government leaders do their part well, the road to economic recovery might come sooner, and not after five long years as projected by some economic experts.
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