The Philippine economy is expected to recover at a “steady yet moderate phase” following the reimposition of general community quarantine or GCQ in Metro Manila and nearby provinces, the Department of Finance (DOF) said recently.
In a statement, Finance Secretary Carlos Dominguez said economic rebound is seen to proceed in the third quarter of the year, given the calibrated reopening of businesses since the end of May. But he said recovery may happen at a “steady, yet moderate phase, more so after President Duterte made the tough, but necessary decision last week, after groups of medical workers requested for a “time-out” to reimpose a two week MECQ to further boost our healthcare capacity amid a virus resurge.”
The Philippine economy contracted by 16.5 percent in the second quarter of the year, plunging the country into a recession. In the first half of the year, economic contraction averaged at nine percent.
According to Dominguez, the economy will improve in the second half of 2020 if all sectors work together to shore up consumer confidence and to curb the spread of the coronavirus.
While he acknowledged that the two-week enforcement of MECQ in Metro Manila and most areas of Calabarzon would negatively impact livelihoods, production and household consumption, he said this measure could have positive benefits in the long run.
“As I have said earlier, the whole world is learning how to dance with this lethal virus: two steps forward and one step back,” he said.In the meantime, the finance chief said the government has the resources necessary to endure the challenges brought about by this health crisis. Dominguez, however, also emphasized the need to ensure that the country has enough fiscal resources for a protracted fight against COVID-19.
Secretary Dominguez said the government is prepared to spend P180 billion for its fiscal stimulus program. This includes the P40 billion tax relief to be granted to businesses, with the proposed five-percentage point reduction in corporate income taxes under the Corporate Recovery and Tax Incentives for Enterprises bill.
The remaining P140 billion will be allocated under the Bayanihan to Recover as One bill or Bayanihan 2, which is also pending in Congress.
With additional reports: The Philippine Star Mary Grace Padin
Photo Sources: asia,nikkei.com, philstar.com, panaynews.com
