The National Economic and Development Authority (Neda) believes the Philippines can further ease mobility restrictions—with the cooperation of the rest of the populace—most probably by March and pave the way for an economic comeback this year.
In a briefing on Monday, Acting Socioeconomic Planning Secretary Karl Kendrick T. Chua said the general community quarantine (GCQ) in Metro Manila and nearby areas costs the economy P700 million in wages and salaries daily. This cripples consumption and hinders the growth of the Philippines economy.
However, Chua said if the government eases mobility restrictions by March, there is a chance that the economy will recover starting in the second quarter of the year. He said this will still make it possible for the economy to register 6.5 to 7.5 percent growth this year.
“We hope that by March, we can make a turnaround hopefully in the second to the fourth quarter. So far, so long as we manage the risks better, we do not see a significant change in our economic growth trajectory. So we can still achieve the 6.5 percent to 7.5 percent [target this year],” Chua said.
Chua said regions such as the National Capital Region (NCR) have been placed in GCQ for the past 12 months. Filipinos have already learned to “live with the virus” as evidence showed by recent data.
In a presentation, Chua said the further opening of the economy in October 2020 did not see Covid-19 cases spike, nor did it go up during the year-end holiday season. The trajectory of the number of daily confirmed cases has been on a decline.
Further, Chua said he is optimistic that the arrival of the vaccine will improve confidence among consumers and will boost the economy. This will ensure the recovery of the economy in the next three quarters of the year.
“As I mentioned, 95 percent of the time, your safety, everyone’s safety is driven by your personal behavior of wearing a mask and washing hands, social distancing and avoiding crowds. If you do all these, it will really open the economy but if people violate it and have parties and so on without those precautions, then our progress will be lost. The [economic] scarring is there and we have to minimize it,” he added.
Chua said the government has already extended a P1.258 trillion or 6.7 percent of GDP from the start of the pandemic.
Together with the reform bills, the total assistance from the government will reach P2.567 trillion or 13.8 percent of GDP.
The speedy implementation of Bayanihan II, Chua said, and its extension June 30, 2021 and the 2020 budget to December 31, 2021 can effectively provide additional fiscal stimulus.
“We will have to prioritize these because we have proposed more stimulus [spending]. When we implement it and we see that more is needed, then we will be open to that [additional stimulus],” Chua said.
Chua said the Financial Institutions Strategic Transfer (FIST) Act is now pending for signing of the President while the Government Financial Institutions’ Unified Initiatives to Distressed Enterprises for Economic Recovery (GUIDE) Act is on second reading in the House of Representatives.
He said the Corporate Recovery and Tax Incentives for Enterprises Act (CREATE), which aims to lower taxes and give tax incentives, will also contribute to the assistance of the government to businesses.