The National Economic and Development Authority (NEDA) said that allowing businesses to fully operate is a more sustainable approach than providing government subsidies to sectors that lost their income as result of the prolonged lockdowns.
Socioeconomic Planning Secretary Karl Kendrick T. Chua said on Thursday, Oct. 28, that the businesses and the people would gain little from any stimulus spending because the economy remains under various levels of quarantine controls.
"My position has always been to safely open the economy because that is the best and most sustainable way to get the economy started,” Chua said during a virtual forum hosted by the Economic Journalists Association of the Philippines (EJAP).
“If you lockdown the economy continuously in various levels, then there would be little opportunity for that stimulus to be used,” he added.
There are much greater gains in letting the economy function normally than providing monetary aid, the NEDA chief pointed out.
In particular, Chua cited the multi-billion peso gains the economy, or gross domestic product (GDP), could generated should Metro Manila’s quarantine alert level status downgrade from 3 to 2.
NEDA estimated that the National Capital Region’s (NCR) shift to a lower COVID-19 alert level would boost the country’s GDP by P10.3 billion per week and reduce the number of jobless people by around 43,000 a week.
“If you add the areas outside NCR that will add additional P13.3 per week by moving from alert level 3 to 2 and improve upon our unemployment, meaning reduce the number of unemployed, by 56,000,” Chua said.
“What that means is not the GDP only,” Chua said. “It is the jobs, it is people getting income and addressing their needs. There are very clear indicators why opening the economy will have a direct impact on GDP and the people.”
Under alert level 2, business establishments will be allowed to operate indoors at 50 percent capacity with additional 10 percent capacity if they have a safety seal. For outdoors, they will be allowed at 70 percent.
Metro
Chua believes that now is the right time for further reopening of the economy, as the country marks continuous decline in daily new COVID-19 infections and increase in vaccination.
“We have already survived a spike and we know how to manage this. So I would still let the economy function normally and the additional resources that could be collected from more economic activity be used for more targeted support to certain sectors,” Chua said,
Instead of another stimulus packages Chua said “a more effective and sustainable solution would be to open and let the economy function.”
Instead of another stimulus packages Chua said “a more effective and sustainable solution would be to open and let the economy function.”