18 January 2021
After experiencing one of the longest lockdowns necessary to capacitate the Philippine health system, the country needs to safely allow economic activities driven by the country’s young population, the country’s Chief Economist said.
In the National Economic Recovery Forum attended by over 500 university and college students and organized by the Junior Financial Executives Institute of the Philippines, Acting Socioeconomic Planning Secretary Karl Kendrick T. Chua said that the Philippines has a young population, as 40 percent are 20 years old and below, and it is their activities with their families that help spur growth in various sectors. However, with children not allowed to go out, the economy suffered from dampened demand.
Chua noted that without vaccines, the risk of COVID-19 infection remains and people are not confident to go out, but the government also needs to pay attention to non-COVID related challenges such as hunger, poverty, unemployment, and non-COVID diseases.
“These lockdowns, which came at a big cost, helped us buy some time to improve our health systems capacity. Testing has significantly increased in the past months and case fatality rates or deaths have declined. The far majority of the cases or 92 percent are actually mild or asymptomatic. Beds dedicated to COVID-19 patients have also increased over time and only about 35 percent are occupied as of January 15, 2021,” the NEDA chief noted.
Quarantines have resulted in GDP contractions of 16.9 percent and 11.5 percent in the second and third quarters of 2020, respectively. Each day of General Community Quarantine cost the National Capital Region (NCR), Region 3, and Region 4A around PhP 700 million in wages. Moreover, reverting to Modified Enhanced Community Quarantine could cost NCR and adjacent regions around PhP 2.1 billion in wages a day.
Nonetheless, Chua maintained that the economy is strong enough to recover if we allow it to do so. He reiterated the need for sufficient and safe public transport and the need to boost demand by allowing family activities with strict enforcement of minimum health standards.
“The reality today is that the virus is not going to go away easily and we will have to live with it for a longer period of time,” he said.
Aside from safely reopening the economy, the economic recovery of the Philippines will be driven by the 2021 budget including the PhP 1.1 trillion infrastructure program, and various legislations.
“Our recovery program is comprised of a series of legislations. First is the Bayanihan II, which was extended to June 2021. It provides emergency support and special powers for the government to swiftly address this crisis,” said Chua.
Other measures that will help the country’s recovery momentum are the Financial Institutions Strategic Transfer (FIST) Act, the Government Financial Institutions’ Unified Initiatives to Distressed Enterprises for Economic Recovery (GUIDE) Act, and the Corporate Recovery and Tax Incentives for Enterprises (CREATE) Act. Passage of these bills are sought as soon as possible.
Aside from presenting the updates on the economic recovery program, Chua invited the students to contribute solutions.
“Many people come to me with their ideas of ‘what to do’, but I challenge you to not stop there and also focus on ‘how to do it’ given the reality of limited resources and imperfect institutions,” Chua explained.
Chua, along with three young NEDA staff- Ray Cristofer Gomez, Joseph Christian Singson, and Antonio Lorenzo Tan- also shared their experiences working in government and encouraged the audience to consider this as a potential career path.
“The call for all of us is to do more for the country. In these difficult times, one way to be a part of the solution is to join the government,” Chua said.
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