WHILE COVID-19 is being fought by our frontliners and citizenry, we need to consider how this pandemic is affecting — and will affect — our economy. While the enhanced community quarantine (ECQ) can minimize COVID-19 cases and keep our healthcare system from being overwhelmed, our economy is taking a beating. Due to ECQ, many small and medium enterprises (SMEs) are in danger of serious losses or outright closure.
The prospects of a quick recovery also appear to be dim. The International Monetary Fund (IMF) projected in its recent World Economic Outlook 2020 that the “Great Lockdown” recession could in fact be the global economy’s steepest in nearly a century. If global demand slows, several of our producers and exporters are bound to suffer declines in their sales. Banana growers in the Philippines for instance have already projected that their overseas shipments will drop by nearly 40 percent — from four million tons in 2019 to 2.5 million this year — due to lockdowns and transport curbs in their main markets.
Therefore, it is critical that while significant resources and man-hours are devoted to containing the virus and providing for the needs of ordinary citizens under lockdown, immediate support for businesses should also be made available.
Recently, President Duterte approved the Department of Finance’s P51 billion-proposal to implement a two-month wage subsidy program for small businesses, where their employees can receive anywhere between P5,000 to P8,000 a month for two months, depending on the applicable regional minimum wage. Alongside all the grace periods, loans, and payment extensions provided under the Bayanihan Act, such wage subsidy hopefully keeps businesses open long enough until the lockdown is completely lifted.
Actions should also be taken towards laying the foundation for the country’s resilience and planning out its recovery. To this end, a Technical Working Group (TWG) on Anticipatory and Forward Planning under the Interagency Task Force on Emerging Infectious Diseases (IATF-EID) is already formulating such a plan.
Led by the National Economic Development Authority (NEDA), this TWG had already conducted a 44,000-respondent survey to assess the epidemic’s damage to the economy and understand the needs of SMEs and consumers alike, based on their experiences under the Enhanced Community Quarantine (ECQ). Such surveys are integral for formulating strategies to address the effects of COVID-19 on the economy. Hopefully, the insights from this survey are released soon and prove to be useful.
The UP School of Economics (UPSE) has also released a discussion paper worth considering as the post-ECQ recovery effort is formulated. In the paper, several UP economists argue that the COVID-19 pandemic revealed deep institutional weaknesses that can be addressed once we emerge from lockdown. Areas such as public health, fabrication and logistics, research and development systems, and social safety nets, among others, were among those identified.
Indeed, helping citizens with their everyday needs should remain the foremost concern of the economic recovery effort. But as it is argued in the UPSE paper, any government economic stimulus package could include investments in forward-thinking initiatives towards establishing a nationwide electronic medical records system, fabricating and stockpiling medical equipment, or even modernizing the Bureau of Quarantine.
Stimulus expenditures could also be devoted to boosting supply chains for food and essential goods, as well as augmenting production capacities, warehousing, transport, and distribution channels. The same may be done for technology and research and development, with an eye to promoting the adoption of useful technologies among SMEs, and upskilling workers.
For our part, we filed SBN 1418, on an “Economic Rescue Plan for Covid-19,”which seeks to create a P108-billion fiscal stimulus package that will address the economic impact of COVID-19 and keep our economy on track. This is a counterpart to the measure first filed by Marikina Representative Stella Quimbo.
Rep. Quimbo revealed a new proposal worth P370 billion, at a recent online TWG meeting of the House of Representatives Defeat COVID-19 Committee. This measure basically aims to support “non-essential businesses” so that they do not have to let go of their employees.
At the same TWG meeting, Albay Representative Joey Salceda shared his proposed economic stimulus package which involves P270 billion for transitional, more immediate measures (such as wage subsidies) and a multi-year budget of P1.65 trillion for more long-term interventions.
While several initiatives are underway, it’s imperative that the government and the private sector work with each other. This pandemic could very well be this generation’s great war, and nothing less than a unified effort is needed if we are to recover from this at all.
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Sen. Sonny Angara has been in public service for 15 years — nine years as Representative of the Lone District of Aurora, and six as Senator. He has authored and sponsored more than 200 laws. He is currently serving his second term in the Senate. (Email: sensonnyangara@yahoo.com| Facebook, Twitter & Instagram: @sonnyangara)/PN
