TWENTY-TWENTY is a foregone conclusion insofar as the performance of the Philippine economy is concerned. Everybody suffered this year—from conglomerates and small-scale businesses to office workers and the ordinary Filipino.
But incoming vaccines and the decreasing Covid-19 cases in the nation give us hope that 2021 will be a much better year. As the Christmas season nears, this is the time to be hopeful and thank the Almighty for preventing a worse pandemic scenario.
Twenty twenty-one will the year when we as a nation chart our path to recovery with much hope. Being “cautiously optimistic” may be the right expression to describe how the government sees our rebound from the impact of the pandemic.
With the availability of effective vaccines just around the corner, the government now has every reason to allow the full reopening of the economy without losing sight of health protocols that have enabled us to manage the situation with success so far.
The pandemic situation is expected to greatly improve soon, following the approval of the Pfizer vaccine for distribution in the United Kingdom, the first country to do so, but it will probably take several more weeks before the cure reaches our shores.
This means we have to remain cautious during the Christmas season to avoid a sudden spike in infections, which we can do without the government resorting to the same tough restrictions on people’s movement that it imposed during the enhanced community quarantine (ECQ) period.
Per the Department of Trade and Industry and Covid-19 Task Force, people should continue wearing face masks and face shields, avoid talking and eating in public transport and similar settings, and practice social distancing. On top of frequent hand washing and proper disinfection, I should add that contact tracing should remain a priority in case of new infections.
By observing these protocols, we can further reopen the economy this Christmas Season, especially as the number of active Covid-19 cases in the country fell below 30,000 as this was being written. The daily cases on Friday dropped further to below 1,000, the lowest since July.
Striking the right balance between saving lives and reopening the economy is important to revive consumer confidence and pave the way for a V-shaped economic recovery next year. Moody’s Investors Service, a major credit rating agency, forecasts that the Philippine economy will rebound strongly in 2021.
I am also glad that the government and the private sector have already started preparations to secure the supply of vaccines for millions of Filipinos, starting with frontline workers and the vulnerable sectors.
While this may be a drag on the government’s fiscal position, I believe we should make available free Covid-19 vaccines to at least half of the population. Japan, for example, passed a bill to provide free vaccines to all residents.
The Philippines is not as rich as Japan, of course, and this is why the private sector already manifested its commitment to donate millions of doses of the vaccines. The Villar Group is doing its part in line with this initiative.
At least four vaccines were found to be very effective against coronavirus so far, including those of Pfizer, Moderna, AstraZeneca and the Russian-made Sputnik V. Russian President Vladimir Putin, in fact, already ordered a mass inoculation against Covid-19.
In the Philippines, President Rodrigo Duterte issued Executive Order 121 on December 1 granting authority to the director-general of the Food and Drug Administration to issue an Emergency Use Authorization for Covid-19 vaccines. It allows the FDA to accept the regulatory decision of international bodies such as the World Health Organization and the US Center for Disease Control.
Along with vaccine procurement, the government is implementing economic stimulus measures to support job generation and encourage local and foreign companies to invest in the country. The Philippines remains one of the most dynamic economies in the world, given its stable macroeconomic fundamentals, large domestic market, young and talented labor pool, and improved peace and order situation.
The employment situation, meanwhile, is showing encouraging signs. The Philippine Statistics Authority reported last week that the unemployment rate eased to 8.7 percent in October, from 10 percent in July and 17.6 percent in April. A further reopening of the economy through wider access to public transportation should further improve the jobless figures.
I agree with the assessment of Economic Planning Secretary and National Economic and Development Authority Director-General Karl Kendrick Chua. The reopening of the economy reduced the number of the unemployed as of October this year and the figure could have been lower if the economy were reopened further, along with safe and sufficient public transportation.
The Bangko Sentral ng Pilipinas, for its part, is doing its role to stimulate the economy by reducing borrowing and lending rates by a total of 200 basis points this year and slashing the reserve requirements of banks by another 200 bps. I think banks should also do their part by lending to businesses and households that were affected by the pandemic so that they can bounce bank and contribute again to job generation and economic revival.
It is also time for banks to pass on the BSP’s record-low interest rates to their small clients who need a financial lifeline at this time. We should all do our part in helping the economy recover from the slump caused by the pandemic and in safely bringing back more Filipinos to the active labor force.
The year ahead is full of hope. The current year is almost gone and things can only get better.
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