Delay in MGCQ shift prompts review of economic goals

MANILA, Philippines — Economic managers will revisit their goals after President Rodrigo Duterte rejected their proposal to further ease coronavirus restrictions and allow more activities to proceed next month.

The interagency Development Budget Coordination Committee will soon “review” this year’s economic targets, Acting Socioeconomic Planning Secretary Karl Kendrick Chua said in a Viber message on Tuesday.

“We support his decision and will work hard to rollout the vaccine so that we can further open the economy,” Chua said in a separate statement to reporters. 

A delay in relaxing one of the world’s toughest lockdowns puts at risk the Duterte administration’s 6.5-7.5% gross domestic product (GDP) growth target this year, and more ambitious 8-10% goal next year.
 
Chua was the leading advocate of easing quarantines in the government, arguing that prohibitions in some businesses are fanning hunger as joblessness remained elevated. As it is, Metro Manila, the center of business and economy, has been under general community quarantine since August, together with seven other areas, while the rest are under the looser modified GCQ (MGCQ).

For a while, Chua’s appeal for the archipelago to be placed under MGCQ appeared within reach. But already-delayed COVID-19 vaccinations promised to begin this month are now unlikely to happen because supplies have not arrived, removing one critical condition for quarantines to get loosened.

Asked when he would renew his appeal for a nationwide MGCQ, Chua only said “when vaccines are rolled out.”

For Nicholas Antonio Mapa, senior economist at ING Bank in Manila, rolling back lockdown measures alone will not work if consumers are still afraid to go out and confidence remains weak.

“We continue to believe that growth momentum will be subdued, regardless of type of community quarantine, with consumer confidence shot with the vaccines still out of reach,” Mapa said in an emailed commentary. 

“The one true antidote to the lack of confidence would be the vaccine procured by the government as this would generate GDP momentum via increased government expenditure while simultaneously curing Filipinos’ anxiety tied to catching the virus,” he added.

Still, London-based Oxford Economics, a think tank, believes more mobility is vital for recovery. “Further falls in Covid cases in an environment of relaxed activity conditions may boost household and business confidence, adding to the support to the economy from rising commodity prices and strong external demand from (advanced economies),” it said.
 
With consumer still stuck at home and businesses still struggling, observers are looking to the government to step up its game, but Chua had once again thumbed down another stimulus package now being prioritized by the House of Representatives. 

Contrary to state concerns of rising deficit, Marikina Rep. Stella Luz Quimbo, one of the stimulus authors, said funds are enough for a fiscal push.

“There was P1.6 trillion in cash as of end-November. This is something that we need to validate. But as it appears to me there is sufficient cash,” Quimbo said in a text message. — with Ramon Royandoyan