‘Philippines to bounce back better than neighbors’

MANILA, Philippines — The Philippine economy is in a better position to survive the impact of the coronavirus disease 2019 (COVID-19) crisis than its neighbors in Southeast Asia, an economist-lawmaker said yesterday.

House ways and means committee chairman Joey Salceda said the economy has “strong fundamentals” that make it more resilient than its neighbors.”

The Albay representative said that while the COVID-19 crisis and measures implemented by government, particularly the two-month enhanced community quarantine, will have a huge impact on the economy, he expects it to bounce back faster than most Southeast Asian nations.

“Our fiscal and monetary position is among the strongest in the region. Our economy is remarkably resilient and we have several advantages over our neighbors,” he told The STAR.

“We will probably hit 46 percent to 48 percent debt-to-GDP (gross domestic product) this year, and that would still be among the best in Asia,” Salceda stressed.

The lawmaker maintained the fiscal policies of the administration have left the local economy robust over the past decade.

“Our largest companies are very liquid, after years of good fiscal and economic stewardship by successive governments, and because of President Duterte’s sound economic policies,” he pointed out.

Salceda said the younger population of the Philippines – with a median age of about 25 years – is also an advantage.

“As soon as you pump money into consumers, and as soon as you can reasonably allow them to go out and buy things, everything else begins to come back into place,” he pointed out.

Salceda said he expects the GDP to shrink by as much as 9.6 points in the second quarter of this year.

“If we are able to bounce back to 0.4 percent growth by third quarter and 1.2 percent by fourth quarter, both of which I believe are very reasonable, your full year GDP growth rate could be -1.1 percent, which I think is among the best outcomes you can get given the circumstances,” he said.

Still, Salceda explained the government needs to address several “institutional” challenges that put the economy into a disadvantage.

He said Singapore and Malaysia have quicker decision-making processes due to their parliamentary form of government.

“They can easily adjust tax and economic policies to suit the evolving demands of the crisis. Our system of republican checks-and-balances, on the other hand, is designed to prevent abuse in normal times,” he explained.

But the lawmaker said the government could address such disadvantage by broadening its policies during national crisis, just as Congress did in passing Bayanihan to Heal as One law that gave special powers to the President.

“In other words, let’s protect our people and finish the job of defeating this virus. The economy will survive, because our fundamentals will remain very strong,” the lawmaker stressed.

“In this virus, speed is your ally and delay is your biggest enemy,” he added.