The safe reopening of the economy restores jobs, according to the NEDA chief.
Karl Kendrick Chua, the Secretary of Socioeconomic Planning, has emphasized the importance of allowing the economy to function properly rather than clamping it down and implementing stimulus measures that will have minimal impact on domestic output and the people.
Chua said any additional cash aid should still be targeted and “there should be a way” for the people to spend this stimulus during the Economic Journalists Association of the Philippines (EJAP) virtual economic forum on Thursday in response to a question about his position on the proposed additional stimulus measure.
With varying levels of movement restrictions still in place around the country, Chua believes there will be “limited opportunity” to utilize the stimulus.
“My view has always been to securely reopen the economy because that is the greatest and most long-term approach to kick-start the economy.” That is, it is not just based on GDP (gross domestic product). It’s about jobs, about people getting paid and being able to meet their basic necessities,” he explained.
To address the rise of coronavirus disease 2019 (Covid-19) infections, Metro Manila, among other parts of the country, has been placed under the government’s strongest form of mobility restriction, the enhanced community quarantine (ECQ), three times since 2020.
The first occurred from March 17 to May 31, 2020; the second occurred from March 29 to April 11, 2021; and the third occurred from August 6 to 20, 2021.
The government gave cash subsidies of up to PHP8,000 to impacted individuals and families belonging to about 80% of the population during the implementation of the ECQ in 2020.
During the succeeding ECQ installations, cash subsidies were also distributed.
However, Chua, who is also the director-general of the National Economic and Development Authority (NEDA), said the situation has improved since last year “because we tackled the rise and expanded vaccination.”
“Thus, I believe that the most effective method to restart the economy is to open it up.” Instead of closing the economy, not allowing 75 percent of the population to work, and then trying to find resources to feed these people, which, as you know, cannot be multiplied, this will have the effect of increasing sales turnover, hiring more people, providing more taxes to the government, and using those (taxes) virtuously to provide more targeted support to the sectors that really need it,” he said.
The government expects the economy to increase between 4% and 5% this year, reversing last year’s 9.6% loss.
Domestic output increased by 11.8 percent in the second quarter of this year, reversing a five-quarter streak of negative growth.
Chua did not provide an estimated range for the third quarter print, but he did say he expected further growth, citing gains in imports, exports, and manufacturing, among other things.
He stated that the government plans to speed up its Covid-19 vaccination program in order to better manage risks while restarting the economy and implementing the recovery plan.
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