Credit to Author: Anna Leah E. Gonzales| Date: Fri, 07 Aug 2020 16:18:44 +0000
The sharp contraction of the Philippine economy in the second quarter of this year is a signal for Congress to pass stimulus measures immediately to hasten the resumption of economic activities, a business group said on Friday.
In a statement, Benedicto Yujuico, president of the Philippine Chamber of Commerce and Industry (PCCI), said the recession the country is now in was not “surprising.”
The Philippine Statistics Authority announced on Thursday that the country had plunged into a recession after gross domestic product shrank by a record 16.5 percent in the three months ending June on account of the disruptive impact of the coronavirus disease 2019 (Covid-19) and the lockdowns imposed to curb its spread on economic activities.
The figure was the lowest quarterly growth since 1981, and the third time the country posted double-digit negative growth, after the -10.7 percent in the third quarter of 1982 and the -10.9 percent in the first quarter of 1985.
“I had advised our members not to expect the second- [and] third-quarter numbers to be better unless government acts fast to adopt and implement stimulus packages and allow the full resumption of economic activities,” he added.
“Businesses will need substantial fiscal and nonfiscal support to survive and fully recover,” the PCCI chief said, admitting that he and other members were “struggling with our projections.”
“We cannot do even medium-term planning because of Covid-19’s unpredictability. This situation could persist until such time that a vaccine becomes readily available. And we are looking at 2021 for this,” he added.
Small businesses are now having difficulty paying taxes, compounded rents, loans and interest charges, utilities and manpower, with negative returns, according to him.
Taking out loans is also not an option, since businesses are wary these could lead to bigger loans, he said.
PCCI wants House Bill (HB) 6815, or the “Accelerated Recovery and Investments Stimulus for the Economy of the Philippines (Arise) Act” passed, even as the government is set on passing HB 6953, or the “Bayanihan to Recover as One Act” (Bayanihan 2).
Yujuico also reiterated the group’s call for the full reopening of business activities, warning that “extending the lockdown could worsen the woes of business from which they may never be able to recover, even with fiscal support.”