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— The Editors

PH needs stronger fiscal stimulus to boost economy

By Kris Crismundo

September 8, 2020, 4:18 pm

<p><em>PNA file photo</em></p>

PNA file photo

MANILA – The Philippine government needs to strengthen its efforts in addressing coronavirus disease (Covid-19) and boost its fiscal stimulus to counter the economic fallout from the pandemic, according to a working paper from the Department of Economics of Ateneo de Manila University (ADMU).
 
The working paper “The Philippine Economy During the COVID Pandemic” authored by Joseph Anthony Lim said the Philippines is expected to be the hardest hit economy in East Asia and the Pacific. 
 
“The Philippine government needs to shape up in both fighting Covid and addressing the economy by establishing a stronger fiscal stimulus to a collapsing economy. It has one of the weakest stimuli in the world,” the ADMU paper said.
 
It also recommended to economic managers not to be “overly conservative” with their positions on fiscal deficits.
 
“The economic managers are more conservative and do not want the fiscal deficit to go beyond 9 percent of GDP (gross domestic product). But many countries, including the US, have crossed way beyond (the) 10-percent line in terms of fiscal stimuli,” it added.
 
The paper also supports bills in the Congress such as Accelerated Recovery and Investments Stimulus for the Economy (ARISE) and the Financial Institutions' Strategic Transfer (FIST) along with the extension of net operating loss carry-over (Nolco).
 
“Given the extent of income losses across the firms in the entire economy because of the world-wide calamity of Covid and lockdowns, the CREATE bill extends it from three years to five years. This is but fair given the extent of income and economic collapse we have been experiencing,” it added.
 
ADMU’s working paper also listed infrastructure that should be prioritized by the government, which include agri-rural infrastructure, clean energy, land and water transportation infrastructure, and infrastructure and economic activities in poor provinces. (PNA)
 
 
 

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