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Additional steps toward reopening the economy, which were reaffirmed at the President’s first State of the Nation Address (SONA), will support economic recovery and assist in addressing issues brought on by the pandemic.

Responding to inquiries from the Philippine News Agency, Michael Ricafort, chief economist of Rizal Commercial Banking Corporation (RCBC), said that challenges brought on by the pandemic will be partially addressed with additional measures to open the economy, such as the ongoing campaign against the coronavirus disease (Covid-19).

Achieving herd immunity, according to him, “would be the more sustainable source of better economic recovery prospects in terms of allowing greater capacity for businesses/industries that entail more investments and employment, thereby helping solve many of the problems presented by Covid-19 in terms of continuity of more business operations,”

In addition to increasing tax revenues, Ricafort claimed that ensuring corporate operations will “help cut the country’s budget deficit and, in turn, lessen the need for more government borrowings.”

The economic team members “generally have the experience, expertise, credibility, and track record in terms of delivering the goals/priorities, as a good starting point/foundation,” he added, adding that the programs put forth by the second Marcos government’s economic team are expected to improve the economy’s growth potential.

According to Ricafort, “the country has been fortunate to have good economic teams over the past 10-20 years” when it comes to implementing economic and fiscal/tax reform measures, closing the budget gap, lowering the country’s debt-to-GDP ratio, and pursuing the objective of raising domestic output.

The massive debt accrued during the pandemic, he continued, “is now the specific difficulty, and it has reached almost PHP5 trillion since 2020.

With the help of “more disciplined spending/other austerity measures; as well as faster economic/GDP growth to bring down the debt-to-GDP ratio, from the 17-year high of 63.5 percent in view of the international threshold of 60 percent,” Ricafort said the amount of pandemic-related debt needs to be paid in large part through higher government revenue.

The reopening of the economy is thought to be the main driver of economic growth this year.

In his inaugural State of the Nation Address (SONA), President Ferdinand Marcos Jr. declared on Monday that the government would no longer impose lockdowns since the economy could no longer bear yet another one.

According to Ricafort, greater government investment, particularly on infrastructure, decreased Covid-19 infections, more election-related spending, resumed international travel, and face-to-face instruction are all likely to contribute to the domestic economy’s growth.

According to him, the demographic dividend and ongoing economic liberalization have helped put the economy back on pace to reach its 6-percent level growth potential.

For this year, economic managers have targeted growth of 6.5 to 7.5 percent.

Gross domestic product (GDP), a key indicator of economic growth, increased by 8.3 percent as of the first quarter.

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