Striking while the iron is hot

Months have passed since the national government enforced lockdown measures to curb the onslaught of the Covid-19 pandemic. In that time frame, the world was brought to its knees worse than ever—halting global mobility, accelerating economic slowdown, resulting in the biggest health crisis in the 21st century. Though few countries have been spared with close to zero cases,  no country was exempt from the pandemic’s echoing global repercussions.

Currently, the Philippines has a total of 360,000 active Covid-19 cases, with little signs of slowing down. Filipinos continue to cope with this pandemic as they strive hard to comply with health measures imposed by the government. Slowly, our economy is inching to recovery. How long will this take and how the government should approach this process of recovery remain to be seen.

According to the Philippine Statistics Authority (PSA), the economy is suffering a -16 percent GDP decline for the second quarter (the most since 1981), technically entering into a recession and has severely impacted the following sectors: Accommodation and Food Services, Transportation and Storage, Arts, Entertainment and Recreation, and Construction. If one compares these sectors with last year’s second quarter, it is not surprising that only the sectors of Information and Communications, Financial and Insurance, Public Administration and Defense, and Agriculture, Forestry and Fishing, posted positive growth rates.

Repeatedly, studies show that a sustainable food and agriculture system is linked to more jobs and economic growth—and may even be robust throughout a pandemic. This, however, should not to be construed as the food and agriculture sector impervious to the pandemic. Considering that under the current situation, it is our food security which is primarily vital and essential for the country’s economic survival, our government should focus on expediting the development and sustenance of our food and agriculture industry.

Under the present economic structure, three highly urbanized regions—National Capital Region (NCR), Calabarzon (Region 4-A) and Central Luzon (Region 3)— account for almost two-thirds of the country’s total gross domestic product, while the remaining one-third is shared by the rest of the 14 regions. To address the decongestion of these areas, Congressman Sharon Garin, Chairman of the House Committee on Economic Affairs, called for the swift passage of House Bill 7111 or the “Balik-Probinsya Program Act of 2020,” where it seeks to promote regional socioeconomic development, and establish mechanisms for sustainable reintegration. She added, “This condition reflects a highly unequal and inequitable socioeconomic development across regions in the country.”

In partnership with local government units and the private sector, this bill aims to support jobs, employment, and other income-generating activities in those regions. Due to the pandemic which has resulted in the loss of jobs in the NCR, it may be worth shifting the lens of economic activity and stimulate growth to other regions. Decongestion may not only provide positive economic impact on these regions but may also help flatten the curve of Covid-19. Now is the opportune time to strike while the iron is hot.

Indeed, the implementation of this bill after its passage and approval, is a daunting task. One of the foreseeable issues arising from this would be the safeguarding of a robust economic development among the regions. It would be difficult to monitor and facilitate the behavior of businesses and firms in far flung areas, more so ensure that these market players do not engage in anti-competitive behavior—which is detrimental to sustainable and progressive economic development. At the helm of this challenging task is the Philippine Competition Commission, which is legally mandated to ensure that businesses compete in a manner that is fair, sustainable, and beneficial not only to themselves but to consumers as well. Admittedly, the road to economic recovery will not be a simple one. Yet this is a challenge that the PCC is willing to face, along with other government agencies.

While it appears that our economy is headed to an uncharted territory, new opportunities will arise. Economic pathways have acquired another dimension, not just physical but digital. The ICT sector continues to take a pivotal role for development since digital connectivity has significantly paved its way through consumer markets, other sectors, and industries. With the administration’s “Build, Build, Build” program, this will be a crucial tool for the country’s overall economic connectivity, growth, and development in farther areas.

Commissioner de Claro Jr. is a CPA lawyer who has worked in companies in the fields of manufacturing, mining, telecommunications, real estate, and banking and finance prior to his appointment to the Philippine Competition Commission. A litigation and corporate lawyer, he once served as legal consultant to the Department of Environment and Natural Resources. He graduated from the De La Salle College with a BS in Commerce, Major in Accounting and earned a Bachelor of Laws degree from the Ateneo de Davao Law School.


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