Chua: Economic recovery remains ‘very uncertain’

MANILA, Philippines — The recovery of the Philippine economy remains “very uncertain” due to the coronavirus pandemic, the country’s top economist said earlier this week as he called on all sectors to do their part in containing the virus.

Acting Socioeconomic Secretary Karl Chua said the enhanced community quarantine (ECQ), which forced thousands of businesses to close shop, was implemented during much of the second quarter, so April and May would “look really bad.”

He said the gross domestic product (GDP) projection for the second quarter would be “worse” than the first quarter as the quaratine shut down 75 percent of the economy.

“Our recovery is very uncertain, but we can make the direction clearer if, number one, the government will proactively implement the recovery program it has started and we helped 18 million poor families get social amelioration and 3.4 million small business employees get their wage subsidy,” Chua said at a press briefing.

“But more importantly, the second one is the cooperation of the entire nation, of each Filipino in ensuring that they practice the minimum health standards like wearing of mask, washing of hands, staying at home unless for essential activities. We have to help (achieve) recovery,” he added.

Chua said the recovery would take long if the virus spreads again because of the refusal of the public to observe health standards.

The Philippine economy shrank by 0.2 percent in the first quarter - the first since 1998 during the combined El Niño and Asian financial crisis - as the quarantine restrictions disrupted the operations of several sectors. The coronavirus crisis has also forced the government to set aside billions in aid to low-income households and workers sidelined by the quarantine.

State revenue weres also affected by the pandemic, with the internal revenue and customs bureaus collections dropping year-on-year by P179.37 billion in the first four months.

Officials are hoping that the country’s economy will perform better in the third quarter because of the easing of quarantine restrictions.

“Since June, many areas in the Philippines are under GCQ (general community quarantine) or modified GCQ...Our prospects are becoming clearer as we enter the third quarter,” Chua said.

He likened the Philippines to a patient who is recovering in a regular hospital room and is being provided with dextrose. He said the instruments for economic recovery include proposed laws like the second Bayanihan Act, FIST, which seeks to help banks dispose off bad assets or loans; GUIDE, which aims to assist businesses through low interest loans and credit guarantees, and CREATE, which provides tax incentives to sectors affected by the pandemic.