Laser-like focus needed to keep economy afloat

Yes! when the President said, “We cannot afford more lockdowns.” Oh no! when he followed up with “But I really do not know what to do. I have to listen to the task force....” and “If something wrong happens, I have to be strict....”

Those three lifted lines from the President’s last State of the Nation Address pretty much sum up what I think is going to be the story of our lives in the next few months as the pandemic’s deadly virus mutates to possibly even deadlier and infectious variants.

Already, the now much-feared Delta variant is accountable for higher reported cases in the US, Indonesia, India, and France. In the Philippines, local transmission has recently been established, and health advisers are once again calling for tighter measures.

The National Capital Region (NCR), under a more relaxed general community quarantine (GCQ) during the first two weeks of July, has now been put under “heightened restrictions” until the end of the month, mainly in not allowing children to go to malls and observing longer curfew hours.

Fear strikes me at the thought of further restrictions as our reported daily infection rates continue to rise, and more importantly, of those who need to be urgently treated, thus filling up hospitals’ intensive care units to full capacity again.

Protecting work

This is what happens when our government has acted a little too late and has put  all of its eggs in only one basket, i.e., by regarding vaccines as the only shield possible to stave off serious cases of COVID-19, but not securing enough supplies early enough. Consequently, the country’s vaccination pace continues to be dragged down by an erratic delivery schedule of vaccines.

This is what happens when the health of the economy receives second-rate attention, instead of laser-like focus to keep workers and employees safe from infection as they commute daily to work and labor  for hours in offices or shop floors.

With almost all of frontline health workers and senior citizens vaccinated, those who have to eke out a living must now be prioritized to help them continue  to earn to feed and house their families. This is the only way to keep the economy afloat while the pandemic lingers on or gathers worse health threats.

The government must find better ways of keeping joblessness at bay, and one initiative worth looking into would be to ramp up government projects, including those under the Build Build Build program.

More money is needed to assist the remaining distressed micro, small and medium-sized companies or MSMEs to continue operating. We must find better ways to help them survive the blow-hot, blow-cold quarantine strictures that have affected consumers’ spending habits.

Aside from easing the flow of short-term loans to cover for temporary operating cash shortfalls, many of them would benefit from improved accessibility to digital business tools and the online market. While the country is seeing the strengthening of financial technologies in the banking sector, MSMEs could benefit from expanded applications.

Preventing further damage

The country’s economic policy makers have taken a step backwards for too long in deference to the health prerogatives espoused by the Inter-Agency Task Force on Emerging Infectious Diseases (IATF). They must speak out more forcefully this time if further damage to the economy is to be avoided.

Quarter after quarter, we have been seeing international economic policy watchers revising downwards their growth projections for the Philippines, often below their estimates for emerging markets and developing economies.

The International Monetary Fund (IMF), for example, puts Philippine economic growth this year at 5.4 percent, lower than its projection of 6.3 percent for the emerging and developing world. This is also lower than the government’s own projection of a six to seven percent growth.

The IMF, of course, warns that its projections will only hold if the pace of vaccination improves and the amount of fiscal interventions pumped into the economy during the remaining months are enough.

If all the vaccines that the IATF expects to be delivered within the next few months arrive on time and make it to the arms of more Filipinos, we will have transcended a major hurdle in bringing economic recovery to a more robust pace.

Otherwise, with more virulent variants threatening to bring total lockdowns back, further deterioration of the economy leading to another year of negative growth could be a quicksand that would drag us down deeper into despair.

As such, we must rightly view the pandemic as a problem that needs to be tempered. More importantly, we must without hesitation be clear that this battle against the virus and its variants is first and foremost a fight to keep the economy afloat.

Fintechs, digibanks rise

In a spot of good news, the country may soon see its first true unicorn rising.

Startup Mynt, a Philippine fintech that is behind the immensely popular GCash app, had clinched $175 million in a funding round last January that boosted its value shy of a billion dollars, which is the coveted amount that determines unicorn status for new companies funded through venture capital.

Mynt is on its way to acquiring additional funding in the near future, thanks to the pandemic and an astute management that has chartered its user-base growth and acceptability to over 11 million Filipino subscribers.

Meanwhile, the formal banking sector is warming up to the digital revolution, with more bank companies powering up their systems to improve online financial transaction capabilities. Notable also is the rise of full digital banks, like Union Bank’s UnionDigital, which could help shift retail transactions in the country to digital channels.

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Should you wish to share any insights, write me at Link Edge, 25th Floor, 139 Corporate Center, Valero Street, Salcedo Village, 1227 Makati City. Or e-mail me at [email protected]. For a compilation of previous articles, visit www.BizlinksPhilippines.net.