Economic cost of virus, typhoons seen at P3.4 trillion

MANILA, Philippines — The Philippines may incur P3.4 trillion in economic losses this year due to the pandemic and the destruction brought about by the recent typhoons, a lawmaker and economist said.

In a virtual economic forum organized by Security Bank, Marikina City Rep. Stella Quimbo said the economic damage arising from the pandemic-induced recession may hit P3.3 trillion this year.

“Estimates of gross domestic product contraction in 2020, which is about 10 percent, and if we also include the six percent growth if COVID did not happen, then that would be roughly about P3.3 trillion,” Quimbo said.

Quimbo said the economy lost another P100 billion due to the damage caused by Typhoons Quinta, Rolly, Siony and Ulysses.

Economic managers, through the Development Budget Coordination Committee (DBCC), see a deeper contraction, with gross domestic product (GDP) shrinking by 4.4 to 6.6 percent this year and a slower recovery with a growth of 6.5 to 7.5 percent next year.

The DBCC is revisiting its economic forecasts after a deeper-than-expected 11.5 percent GDP contraction in the third quarter. The country slipped into recession with a record GDP contraction of 16.9 percent in the second quarter from 0.7 percent in the first quarter.

To help soften the impact of the massive economic damage, Quimbo is pushing for the passage of a third Bayanihan Law.

Quimbo said the proposed P4.5 trillion national budget for 2021 was based on the assumption that the GDP would only contract by 5.5 percent as this was finalized in June.

“The time is ripe for a Bayanihan 3. The proposed 2021 national budget is still based on an expected contraction of about 5.5 percent,” Quimbo said.

Of the proposed amount under Bayanihan 3, Quimbo said P100 billion would go to workers subsidies in the form of testing, paid sick leaves, and overtime pay, while another P100 billion would be for capacity building for critically impacted businesses.

The proposed bill also extends P70 billion worth of subsidies for households impacted by the pandemic and P50 billion for the rehabilitation of typhoon-affected areas.

Quimbo said P30 billion would be for unemployment assistance and cash for work, P25 billion for easing of procurement of COVID-19 vaccines, P20 billion for households affected by the recent typhoons as well as P5 billion for internet allowances for teachers and students.

Quimbo said the P838.4 billion response-related funds identified by the Department of Budget and Management (DBM) includes the P589.8 billion for the Department of Public Works and Highways (DPWH) that have been previously been tagged under the Build Build Build program prior to the pandemic.

Quimbo lamented the Department of Health was only allocated P31.4 billion that is not enough to procure vaccines for Filipinos.

Bangko Sentral ng Pilipinas Francisco Dakila Jr. said the BSP  is ready to act on a timely and appropriate manner as the country is now facing an unprecedented period.

“We are doing this on a whole government approach, realizing that no one institution can do it alone. So it has to be a team effort by the whole of government,” Dakila said.