APEC urges governments to relax economic policies as uncertainty lurks

CEBU, Philippines —  The Asia-Pacific Economic Cooperation (APEC) called on authorities to start thinking about the long term to minimize economic harm, while facing threat of coronavirus disease 2019 (Covid-19).

In a report furnished to The FREEMAN, APEC, through the Policy Support Unit (PSU), suggested that monetary and fiscal authorities could consider maintaining accommodative policies to support economic growth during this time of heightened uncertainty.

“In the medium to long-term periods, economies could look at structural reforms that ensure immediate action by governments, build stronger healthcare systems, and allocate resources for research and surveillance of infectious diseases,” the report said.

“If past outbreaks have taught us anything it is that the region can bounce back, so long as economies cooperate and put in place the right measures. It is also relatively more prepared,” it added.

APEC admitted that the COVID-19 can weigh down growth of the Asia-Pacific economy at least in the near-term, and authorities must map out measures to minimize its lasting harm.

“The coronavirus is a prominent downside risk, adding to ongoing uncertainties on the external front, such as trade tensions, Brexit, and environmental catastrophes on both sides of the Pacific,” APEC said.

The report said its further effects are yet to be determined.

It cited the already observed decline in travel and tourism, adding that an associated adverse impact on retail and hospitality receipts as well as transport sales are expected to reverberate around the world.

“But it is still early to quantify the impact of the coronavirus’s spread on global economic growth. The world today is a different arena. China accounts for 21.4 percent of world GDP (gross domestic product) compared to around 4.5 percent during the SARS (severe acute respiratory syndrome) outbreak,” it added.

The report further said the increased interconnectedness of the global economy and the deep integration of international supply chains amplify the impact of the current health shock to an already-fragile global economic recovery.

“Looking ahead, a deterioration in consumer and investor sentiments could translate into significant economic and financial risks,” it said.

Earlier, the Cebu Chamber of Commerce and Industry (CCCI) made an appeal to the banking sector, utilities and commercial space owners to loosen their belts and help customers or consumers cope with the economic hiccup caused by the lingering scare of Covid-19 outbreak.

“We are asking the banking institutions to grant reprieve on amortization and waive interest payments for six months period to troubled businesses, especially those that are just starting but are already challenged by the epidemic and could barely operate,” said the official position paper released recently by the Chamber in an effort to help the Cebu economy cope with the business slowdown.

Mall operators and commercial space owners are also requested to grant rental holidays for a six (6) -month period for those opting to close, or a cut on rental rates for tenants sustaining losses due to very low traffic.

Meanwhile, utility companies like Visayan Electric, MCWD, among others, are also urged to suspend some charges or at least reduce rates and to provide a leeway or moratorium on late payment penalties or notice of disconnection.  JMD