Economic contraction spurs House bid to rush stimulus bill


THE House of Representatives will fast-track the approval of the economic stimulus plan which seeks to bring back the Philippines on its previous growth path, a leader of the chamber said on Thursday.

Noting that the first-quarter gross domestic product figures mark the first decline in more than two decades, House Committee on Ways and Means Chairman Joey Sarte Salceda said, “it validates what we already know: that this crisis is unprecedented, and will require similarly unprecedented action.”

He added: “Let us pass an economic recovery plan that will put us back on our previous growth path. Let us also take this opportunity to see where our economic weaknesses lie and strengthen them with necessary structural reforms.”

With Congress and the Executive working closely, Salceda said the passage of an economic recovery plan could come “hopefully in a matter of weeks. Consumer and business confidence will be key, so government action must inspire confidence in the people.”

According to Salceda, the economic cluster of the Defeat Covid-19 Committee is now finalizing the consolidated version of the proposed P485-billion Philippine Economic Stimulus Act (PESA).

“We just have to finalize the version. But that would require prior coordination with economic managers [for faster approval of the President],” he said.

Monday target

A source said the House Defeat Covid-19 Committee is eyeing to approve the stimulus proposal on Monday. It will be immediately transmitted to the plenary for another round of deliberations.

House Committee on Economic Affairs Chairperson and AAMBIS-OWA Rep. Sharon Garin said the coronavirus disease pandemic could result in the possible unemployment of at least 30 million Filipinos without the necessary economic stimulus interventions.

Marikina Rep. Stella Luz Quim­bo, who cochairs the House Defeat Covid-19 Committee economic cluster, said the country loses around P18 billion for each day of lockdown, especially amid coronavirus fears that would hinder an effective reopening of the economy.

With this, lawmakers said the lower chamber will push for the immediate passage of the P485-billion PESA to help the economy.

Moreover, Salceda said the “Q1 GDP figures also confirm what energy consumption data and mobility data all pointed to before the economic figures were released: the public, including the economy, largely complied with the beginning of community quarantine. Given these numbers, Q2 figures are likely to have been much worse, but by the time the data is released, the worst should have been all behind us.”

The Philippine Statistics Authority (PSA) announced on Thursday that the country’s GDP contracted 0.2 percent in the first quarter. This reflects the adverse impact of Taal eruption in the second-largest regional economy of the country, the Calabarzon, and the Covid-19 pandemic.

Before the Covid-19, the target economic growth of the government for 2020 was 6.5 percent to 7.5 percent.

Bangko Sentral ng Pilipinas Governor Benjamin Diokno has said the BSP’s economic growth assumptions for this year could settle at a low end of -1 percent to zero growth amid the Covid-19 crisis.

The BSP forecast follows Fitch Solutions’s 4.0 percent, ING Bank Manila’s 3.5 percent, World Bank’s 3 percent, Moody’s Investors Services’ 2.5 percent, Asian Development Bank’s 2 percent, Nomura’s 1.6 percent, ANZ Research’s 1.2 percent, International Monetary Fund’s 0.6 percent; Rizal Commercial Banking Corp.’s -1 to 1 percent, and S&P Global Ratings’ -0.2 percent.

Prepared

Salceda, an economist, said as the country soon moves gradually from quarantine to a cautious path toward recovery, “we must make the remarkable sacrifice worth it by taking the necessary precautions to avoid large waves of infection that may necessitate more lockdowns.”

Citing his discussion with data scientists, chaos theorists and economists, Salceda said “at this time, we are more ready for the consequences of a reopening even as we await a vaccine possibly in 2021 than for the impacts of another hard lockdown as we know it.”

“Human behavior in our institutions and in the public has begun to be more prepared for the ups and downs of an epidemic,” he said.

But he said measures should still be implemented for another possible wave of infection.

“First, I hope government strategists would steel our nerves during episodic spikes in cases and not fall for the easy default of an unplanned lockdown which we can only do at the expense of resources for our recovery. Localized, maybe, but LGU-managed, not barangay-directed,” he said.

“Second, we must all do our part—the low-cost nonpharmaceutical interventions: wash your hands, wear facemasks, avoid crowds, and maintain physical distancing even at home. Third, the NTF should continue to increase testing, tracing and treatment—achieve 8,000 per day by May 15 and 30,000 per day by May 30,” he added.

Also, Salceda said all hospitals must remain prepared for surges, acquire ventilators for areas where infection waves remain likely, and stockpile enough PPEs to protect healthcare workers.

Image Credits: PCOO



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