MANILA – Socioeconomic Planning Secretary Karl Kendrick Chua has cited the need to let the economy function normally instead of locking it down and providing stimulus measures that will have little benefit to domestic output and the people.
In a reply to a query regarding his stand on the proposed additional stimulus measure, Chua, during the Economic Journalists Association of the Philippines’ (EJAP) virtual economic forum on Thursday, said any additional cash aid should still be targeted and “there should be a way” for the people to spend this stimulus.
With various levels of movement restrictions still implemented nationwide, Chua said there would be “little opportunity” for the stimulus to be used.
“My position has always been to safely reopen the economy because that is the best and most sustainable way to get the economy started. And what that means is it’s not the GDP (gross domestic product) only. It is the jobs, it is the people getting income and addressing their needs,” he said.
Metro Manila, among other places in the country, was placed under the government’s strictest form of movement restriction, the enhanced community quarantine (ECQ), thrice since 2020 to address the rise in coronavirus disease 2019 (Covid-19) infections.
The first was between March 17 to May 31, 2020; the second on March 29 to April 11, 2021; and the third on Aug. 6 to 20, 2021.
During the ECQ implementation in 2020, the government provided cash subsidies amounting to as much as PHP8,000 to affected individuals and families belonging to around 80 percent of the population.
Cash aids were also disbursed during the subsequent ECQ implementations.
However, Chua, who is also the National Economic and Development Authority (NEDA) director general, said the situation has changed between last year and this year “because we have addressed the spike, we have increased the vaccination.”
“(Thus) I think the more effective way to restart the economy is still the opening of the economy. That will create an effect to create more sales turn-over, hire more people, provide more taxes to the government and use that (taxes) virtuously to provide more targeted support to the sectors that really need it rather than close the economy, do not allow 75 percent of the people to work, and then trying to find resources to feed these people, which you know, cannot be multiplied,” he said.
The government’s growth assumption for this year is an expansion of between 4 percent to 5 percent, a reversal from the 9.6-percent contraction last year.
Domestic output registered an 11.8-percent expansion in the second quarter this year, ending its five consecutive quarters of negative growth.
Chua declined to give his forecast range for the third quarter print but said he expects sustained growth after noting improvements in imports, exports, and the manufacturing sectors, among others.
He said the government intends to further accelerate its vaccination program against Covid-19 to better manage risks while reopening the economy, and to implement the recovery program. (PNA)
