The Duterte administration is banking on the passage of the Bayanihan to Recover as One Act (Bayanihan 2) and the proposed P4.506-trillion national budget for 2021 as well as the Build, Build, Build infrastructure program to revive the economy hit by the COVID-19 pandemic.
The Philippine economy shrank 16.5% in the second quarter, its worst on record in almost four decades.
The two straight quarters - January to March and April to June - of negative gross domestic product (GDP) also brought the country to a technical recession, the first time since 1991.
“The economic performance was due to major health crisis,” National Economic Development Authority (NEDA) Acting Secretary Karl Kendrick Chua said in a Palace briefing on Friday.
The economic contraction was blamed on the months-long lockdown to control the spread of COVID-19 in the country.
The Philippine economy was in a standstill during the latter part of the first quarter due to the implementation of strict quarantine measures — enhanced community quarantine (ECQ) in Metro Manila and other high-risk areas from March 17 to May 15, followed by a modified enhanced community quarantine (MECQ) until May 31.
Looser restrictions were then implemented under the general community quarantine (GCQ) starting June 1. Metro Manila and four other nearby provinces, however, were reverted to the stricter MECQ on August 4 and will last until August 18.
“Let's look at the cost... as a result of the ECQ, [we] shut down 75% [of the economy],” Chua said.
“This will be a drawn-out struggle. We are in a marathon rather than a sprint, kaya dapat pag-isipan natin ang tugon para hindi mawalan ng resources lalo na kung magtagal ang problema,” he said.
The NEDA chief noted that the government has a three-pronged strategy to address the economic fallout resulting from the pandemic, namely the swift passage of Bayanihan 2, the 2021 budget, and the infrastructure program.
“Una po ang quick passage ng Bayanihan 2. Within that Bayanihan 2 there is a range of P140 to P162 billion fiscal support to the most affected sectors,” Chua said.
“Meron po diyan pupunta sa healthcare system sa testing and contact tracing, meron din cash for work, social assistance, tourism, education, transport, agriculture. There is also P50 billion that will be capital infusion to government financial institutions,” he said.
The measure also contains regulatory and fiscal relief to help affected businesses.
“In fact, ‘yung aming estimate na total package na we are presenting including the multiplier effect is worth P995 billion,” Chua said.
“That is the amount of the fiscal plus the financial and monetary stimulus that we are preparing. Hopefully approved in the soonest possible time to address all the concerns of the economy being affected by the ECQ,” he said.
The House of Representatives approved this week the Bayanihan 2 on second reading while the Senate passed its version on third and final reading last week.
The proposed P4.506 trillion budget next year, meanwhile, will prioritize budgetary support programs and projects to address the health crisis.
The 2021 budget will be used for the procurement of PPEs (personal protective equipment) and COVID-19 vaccine, basic education programs of the Department of Education to ensure learning continuity, and programs that support information and communication technology requirements for network connectivity and digital technology, among others.
The executive branch is targeting to submit to the Congress the 2021 budget bill by the second week of August.
The executive has 30 days to submit the proposed budget for legislation after the President’s State of the Nation Address on July 27.
The NEDA chief said the government is also banking on the Build, Build, Build program to boost the economy and create jobs.
Chua said this has the “highest multiplier effect” since it can create both direct and in-direct jobs.
“We are prepared to address the concerns that have been raised as result of the ECQ but the priority really is to address health concerns because that is how we can get the economy moving,” the NEDA chief said.—AOL, GMA News