The Philippines’ plan to emerge from the COVID-19 recession may be relatively less than the actual damage inflicted on the economy so far, however President Duterte’s leading economic director said this prudent spending strategy would benefit sectors in need of assistance.
Dominguez noted that the Philippine stimulus package is estimated at 4.2 to 6.4% of GDP, less than the contraction of GDP in the second quarter.19 was $21.05 billion, or 5.72% of GDP.
The 3 countries analyzed through Dominguez were Malaysia, whose GDP fell by 17.1% at the time of the quarter despite a stimulus package valued at 18.2% of GDP; Sweden, whose economy contracted by 8.2% despite a stimulus package equivalent to 10.8-16.6% of GDP; and the United Kingdom, whose GDP fell by 21.7% despite a recovery equivalent to 23.4% of GDP.
“It turns out that no matter how much money countries put in their economies, their GDP would have been greatly reduced anyway.It is not the mere extension of the stimulus package that is now being addressed, but also whether it saves the productive parts of the economy.This is because the challenge is not a systemic contraction or a cyclical crisis.Mandatory mobility restrictions are simply hampering aggregate demand,” Dominguez said.
“If we can keep the pandemic at bay so that serious restrictions are not needed, the economy deserves to recover.In the meantime, we will have to make sure we can adequately finance the country’s desires for prolonged combat against this virus,” he added.Dominguez added.
“We know that the revival of our economy will not take place in a sprint.We are in a position for a long and complicated recovery that requires fiscal resistance.We will continue to deploy our resources wisely until we are sure that we are on the right side of the curve,” Dominguez said.
As such, Dominguez said that the stimulus package planned for Congress, estimated at 140-165 billion pesos, would only be affordable, but also a package that could be fully implemented.
“We are a Bayanihan financially guilty of recovering in an act of singleness, which will provide some other set of tax measures to stimulate the call of customers and companies and Americans severely affected by COVID-19,” the CFO said.
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