House Ways and Means Committee Chairman and Albay 2nd district Rep. Joey Sarte Salceda says that the country needs to prepare for a coming economic “lost decade", wherein global growth is expected to decline once the country recovers from the coronavirus disease pandemic (COVID-19).

“There will be a period of global economic slowdown, as countries naturally scale down their COVID spending and the scars that industries took during the pandemic set in. You will also begin to see the slowdown in productivity due to learning gaps during the school shutdowns,” Salceda said in a press statement on Thursday night, Feb. 17.

Salceda explains that there are three necessary steps in order to mitigate the effects of this projected economic decline in the Philippines.

“First, you want to balance out the effects of our monetary and fiscal exit strategy. As we rollback low interest rates, we have to expand financial inclusion to even out the usual credit contraction that you see when the Bangko Sentral ng Pilipinas (BSP) hikes its rates. You also want to increase public-private partnerships that are low on government liabilities, close down tax loopholes, and improve spending efficiency as we try to narrow the deficit, so that growth doesn’t slow down.”

“Secondly, you want to invest in sectors that are not yet saturated, and where a little investment will go a long way due to a lower starting point. The sector that is hungriest for investment is, of course, agriculture.

“Third, you want to mitigate the effects of COVID-19 on labor productivity, especially the learning gap. The way to do that tactically is to invest in skills development and capitalize on new labor trends such as freelancing... So, we have to invest in access to the internet, free digital skills, and facilitating labor requirements,” he said.

He further explained that the economic lost decade comes as a result of countries maxing out their economic growth through the use of COVID-19 stimulus packages, something that the Philippines is exempt from due to limited stimulus.

United States (US)-based credit rating agency Moody’s Analytics upgraded the Philippines gross domestic product {GDP) growth outlook from 5.6 percent to 6.2 percent in 2021, second only to Vietnam (6.5 percent) among Moody’s projected outlooks for Southeast Asian countries. This supposedly signals significant projected recovery post-COVID.

“We can escape that lost decade and meet our ambitions to become an upper-middle income country with a broad middle class by 2030,” added Salceda.