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Saturday, October 10, 2020

Government needs to spend more amid the pandemic to boost the country's sagging economy

The pandemic compromised the livelihood of our people. Everyone I know lost their job and is struggling financially and emotionally. With that said, some turned into side hustles/ online selling and the numbers are rising, with the hopes that this could help with their income. 


Despite the fact that economic growth and activity have slowed down as a result of the persisting COVID-19 pandemic, government spending should still continue to fast track economic recovery.

 

According to economist and Marikina (2nd District) Rep. Stella Luz Quimbo, government needs to spend even in the midst of a crisis in order to boost confidence levels of the public, especially businesses.


Confidence booster. Marikina 2nd District Rep. Stella Quimbo says government needs to spend more even amid the pandemic to boost the country’s sagging confidence. She joined BDO Chief Investment Officer Frederico “Fritz” Ocampo as a guest in the recent Market Sense webinar. 

"In a bad economic crisis, confidence level is very low—confidence of consumers, confidence of your workers. Everyone's afraid. Fear and anxiety have set in. Even business owners, they don't want to invest. In fact, they'd rather close shop. So this is a situation where government must step in. If the government is not spending enough, then our confidence will be deflated," Rep. Quimbo said as a guest in an episode of Market Sense, a monthly webinar series organized by the BDO Trust Group that combines the latest economic and market developments with seasoned expert advice to help investors take control of their investments and grow their wealth. "We need government to spend because there's a lot of market failures arising from the pandemic," she added.

Rep. Quimbo is one of the principal authors of House Bill No. 6815, or the Accelerated Recovery and Investments Stimulus for the Economy of the Philippines (ARISE Philippines) bill which was already approved by the Lower House. The bill calls for the release of P1.3 trillion in economic stimulus package to jumpstart the economy's recovery from the pandemic in the next four years. It aims to offer various forms of assistance to micro, small and medium enterprises and other sectors adversely affected by COVID-19, and targets to generate around 1.5 million jobs through various infrastructure projects and financial assistance to small businesses from 2020 to 2023. 

 

Projections in 2020 and hopes for recovery in 2021

 

Meanwhile, BDO Trust Group is looking at a gross domestic product (GDP) contraction of 9.6% in the 3rd quarter, and a 6% contraction in the 4th quarter to bring its full year 2020 GDP projection to negative 8.3%.

 

Nonetheless, to echo Rep Quimbo's call for more government spending, BDO Chief Investment Officer Frederico "Fritz" Ocampo said the country is poised for a recovery of 6.6% in 2021, as more government spending enters the economy.

 

“It would allow the economy to recover, and that would be the 2021 story,” he said. “We're facing a recession, which could be the deepest in 35 years. Therefore, the growth drivers were hurt a bit, especially consumer demand, which is 72% of the economy, as well as investments from large local corporates and SMEs. But as the economy slowly opens up once again, you'll see those drivers bouncing back.”

 

He expressed belief that the Philippines can stand out once again in the global stage, anchored on the country’s young population.

 

“The Philippines had 21 consecutive years of economic expansion, surpassed only by Australia. That is a testament to the resiliency and strength of the Philippine economy. While the growth drivers were hurt during the pandemic, the strengths of the Philippine economy remained intact. For instance, our young population is still there,” Ocampo stressed. “In a pandemic, you could see the value of that young population in terms of adaptability to the digital economy, in terms of proficiency in the use of the internet. Later on, these young population, many of them would be creating their own companies and become entrepreneurs. Many jobs were lost during this pandemic. To cope, our young population would be creating their own companies.”

 

12 comments:

  1. True po yan. Karamihan saten talaga ay nawalan ng pangkabuhayan gaya po samin, ngayon po sapat na lang sa pamilya ang kita ng hubby ko di gaya dati na may sobra.
    Kaya ang kabataan talaga ang pag asa ng bayan sa mga susunod na generation.

    ReplyDelete
  2. isa po talaga dapat ang matutunan ay kung paano po mag negosyo...ang dami po nawalan ng trabaho..kaya dapat po talagang maturuan ang mga susunod na generation😊

    ReplyDelete
  3. Makaka recover din ang lahat ❤️❤️❤️

    ReplyDelete
  4. sobrang humina po tlaga ang kita ngayon kumpara sa dati, tapos sa ngayon halos karamihan nawalan dn po ng trabaho, kaya nga swerte pa po dn ung may mga inaasahan tlaga.

    ReplyDelete
  5. Ang galing talaga no bdo dahil pinapakita nya sa bawat tao na kaya kaya natin makarecover sa hirap na pinag dadaanan natin ngayon

    ReplyDelete
  6. Dahil po sa pandemic bumagsak po tlaga ang ekonomiya natin ng bansa. Madaming negosyo ang nag shutdown. Kaya po Yun iba kanya kanya diskarte. And BDO believe na makakaahon din po tayo, unti unti nakakarecover na rin po.

    ReplyDelete
  7. Dahil sa pandemic andaming bumagsak na negosyo,andaming negosyanteng takot na mag invest sa halip nagsara nalang ng kumpanya,and with that kailangan ng govt na maglabas ng pera para ma save ang pabagsak na ekonomiya

    ReplyDelete
  8. Lumiit ang kita po sa ngayon dahil pandemic dami naapektuhan lalo n ang mga trabaho at kabuhayan pero naniniwala ang BDO mkaka ahon po ulit tayo.

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