THE cochairman of the House Economic Stimulus Response Package Cluster on Thursday urged economic managers to make infrastructure and human capital development investments to ensure that the contraction in the gross domestic product (GDP) will not translate into permanently lost income.
Albay Rep. Joey Sarte Salceda said the government should first have to make equivalent investments in infrastructure and human capital development either this year or next year, saying, “I am in talks with the economic managers on this matter.”
“This [16.5 percent GDP contraction in the second quarter] is a bad number, but this is best understood in perspective. Even with 50 percent to 70 percent of mobility paralyzed, the Philippine economy can still
perform at about 80 percent capacity. If that is not the definition of economic resilience, I don’t know what is. We can build on these strengths. But we, the economic team in Congress, and our counterparts in the Cabinet, will have to keep working hard,” he added.
Quick action
Senators said they expect the government to take quick remedial measures to bounce back from 16.5 percent decline in the GDP, even as Senate Minority Leader Frank Drilon described “the grim turnout to be worse than what the Duterte administration expected it to be.”
Recalling that Bangko Sentral Governor Benjamin Diokno had earlier projected it to be around 5.7 to 6.7 percent decline in the second quarter, Drilon noted the Philippines is “now in
recession” after two consecutive declines in the gross domestic product (GDP), as the GDP declined further to 16.5 percent in the second quarter from 0.7 percent in the first quarter.
He prodded the government to “take swift and decisive actions” within the remaining months of the year to help the poor and revive the demand side of the economy, noting how household consumption in Q2 declined by 15.5 percent.
“We need to do a second round of social amelioration program. We should expand it but we must retain those families who received the first tranche because they are the ones who are badly hit by the pandemic,” said Drilon.
Asserting the urgency for Congress to increase the stimulus fund under Bayanihan 2, Drilon noted the House of Representatives had passed the measure on second reading on Wednesday, with a P162 billion stimulus fund.
Meanwhile, the Duterte government should also take a look at strategies on arresting the increasing Covid-19 cases, Drilon added, saying the rising cases “shatter people’s confidence.”
For his part, Sen. Panfilo Lacson compared the Covid-19 contagion that confronted the Duterte administration to a “tightrope act.”
In a statement, Lacson noted that the Covid-19 pandemic “placed the government in a very precarious situation as in a tightrope-like balancing act between the health and economic issues, which presents a no-win-all situation.”
Lacson laments this was “why it is revolting to discover so much unabated corruption in PhilHealth involving billions that could have been put into good use in adequately addressing at least the issue of health.”
However, Lacson said he was still inclined “to believe, as often expressed by the country’s economic managers, that we continue to benefit from our strong economic fundamentals which can pull us through this crisis, until such time that a vaccine that has guaranteed efficacy is finally developed to address the pandemic.”
Proposals for reconstruction
According to Salceda, he is now drafting proposals for economic reconstruction, to be released for government consideration in the coming weeks and months.
Second, Salceda said Congress should urgently pass economic reforms that will enable more investments to enter our country are now urgent.
“We have to pass the Corporate Recovery and Tax Incentives for Enterprises Act [CREATE], the amendments to the Foreign Investments Act, Retail Trade Liberalization Act, and Public Service Act. We have already given our versions of all of these reforms to the Senate, so we hope for their speedy approval,” he said.
“We cannot attract new jobs and new investments if, as the OECD [Organization for Economic Cooperation and Development] says, we are the most restrictive to investments in Asia,” added Salceda, also the chairman of the House Committee on Ways and Means.
Third, the government should also focus on agriculture, which grew by 1.6 percent despite the quarantine, he said.
“Agriculture is a hedge from economic crises. As food will always be an essential good, food production will always be a resilient industry. I am a principal author of the amendments to Agri-Agra, which will boost credit to the whole agricultural value chain,” he added.
He reiterated his proposal [under the stimulus program] to condone the agrarian reform beneficiaries’ loans in LandBank. “This will release 1.228 million hectares of land for more efficient agricultural use, and will benefit 682,000 ARBs,” Salceda said.
LasT, the economist-lawmaker said the country should also expand the healthcare capacity while protecting health care workers at all costs to make consumers and businesses confident.
“Our health outcomes correlate with our economic outcomes. We need to get our stuff together on the health front. There is no tradeoff between health and livelihood. But there are ways to protect both: expand our healthcare capacity, protect health care workers at all costs, make contact tracing and testing effective and widespread, and make consumers and businesspeople reasonably confident,” he said. Jovee Marie N. Dela Cruz, Butch Fernandez