Restoration of confidence crucial to economic recovery – Metrobank

MANILA, Philippines — The restoration of consumer confidence is crucial to get the country back on its feet from the pandemic-induced recession, according to Metropolitan Bank & Trust Co. (Metrobank).

Pauline Revillas, research analyst at Metrobank, said the restoration of consumer confidence to spend outside of discretionary spending is vital to ensure that the country’s economic engines are on a sustained overdrive.

“Thus, social and economic adaptations, alongside sustained interventions such as localized lockdowns, pharmaceutical interventions, etc. will still be essential as the economy continues to navigate through this pandemic,” Revillas said.

The economy contracted by a record 9.6 percent in 2020,  ending 21 years of growth due to the impact of the pandemic.

“The recent surge in COVID-19 infection rates shows that for as long as the virus is still here and vaccination of majority of the population is yet to be achieved, surge and clampdown cycles will remain in place,” Revillas said.

The latest Business Expectation Survey (BES) of the Bangko Sentral ng Pilipinas (BSP) showed businesses turned more optimistic in the first half amid hopes of further reopening of the economy as well as the rollout of COVID-19 vaccines in the country.

The survey showed the overall confidence index improved at 17.4 percent in the first quarter from 10.6 percent in the fourth quarter last year.

Redentor Paolo Alegre, senior director of the BSP’s Department of Economic Research, attributed the improvement of business optimism to the easing of quarantine restrictions and reopening of businesses, the rollout of COVID-19 vaccines, the development of new business strategies, more people adapting to the new normal as well as higher demand for electricity and more construction activities during summer.