PCCI backs NEDA's bid to place entire Philippines under MGCQ

The Philippine Chamber of Commerce and Industry, the country’s largest business group, is throwing its support behind the proposal of the National Economic and Development Authority to place the entire country under modified general community quarantine (MGCQ), the most relaxed quarantine classification.

In a statement, PCCI president Benedicto Yujuico said that the business community shares the call of the NEDA to transition the country to MGCQ “to stem further economic decline and help businesses regain lost grounds.”

On Monday, NEDA chief and Acting Socioeconomic Planning Secretary Karl Chua urged authorities to place the whole country under MGCQ.

In turn, the Inter-Agency Task Force on Emerging Infectious Diseases gave the idea its nod. Also, the agency is submitting the proposal to President Rodrigo Duterte for his approval.

On the other hand, the PCCI lauded the passage into law of the Financial Institutions Strategic Transfer (FIST) Act, a measure that seeks to free banks and financial institutions from bad loans and stagnant properties.

The law seeks to create FIST corporations or specialized asset-management firms that would acquire non-performing loans and stagnant properties from embattled financial institutions.

However, Yujuico said that while the measure could benefit small and medium enterprises (SMEs), further reopening of the economy is needed to further spur recovery.

“Assurances of a steady source of credit for businesses will only sustain their recovery if establishments and public transport are allowed to operate at higher capacity, if restrictions on the movement of people are lifted and consumer confidence is boosted,” he said.

Nonetheless, the PCCI chief said that the business community is acknowledging Congress for passing the bill and the President for signing it into law.

“The pandemic has affected businesses across all sizes and economic sectors, including banks with higher-than-expected credit losses. The FIST law will not only clear banks of bad loans but also improve their liquidity, enabling them to help rehabilitate distressed businesses and support the economic recovery,” Yujuico said.

Emphasizing the need to further ease restrictions, he said that Philippines’ economic growth has been sustained by a strong domestic consumption.

“Economic recovery must be geared towards rebuilding consumer confidence to ensure that the cycle of consumption will continue. Improved consumer confidence stimulates demand which in turn protects existing jobs and leads to the creation of new jobs,” Yujuico said.

Apart from placing the whole country under MGCQ, the NEDA is also proposing the following:

• increasing the capacity allowed in public transport from 50 percent to 75 percent;
• complementing public transport with active transport via bike lanes;
• allowing more provincial buses to operate;
• expanding the age groups allowed to leave their homes from 15 to 65, to five to 70; and
• resuming the pilot-testing of face-to-face classes.

The Philippine economy contracted by 9.5% in 2020, its worst on record since the end of World War II, due to quarantine restrictions to contain COVID-19’s spread that brought economic activities to a standstill.

Earlier, the NEDA admitted the country will continue to see a negative gross domestic product (GDP) in the first quarter of 2021 since economic centers, such Metro Manila, are still under GCQ, wherein several businesses are still closed or operating on a reduced capacity. —LBG, GMA News