ALTHOUGH the country technically exited from the pandemic-induced recession with the 11.8-percent GDP growth posted in the second quarter, lawmakers said it would take a lot of effort for all sectors to sustain that growth, given the impact of the latest, still ongoing strict lockdowns in the major economic hubs.
Still, leaders of the House of Representatives on Tuesday said the Philippines is still in the game for 7-percent GDP growth this year.
However, House Committee on Ways and Means Chairman Joey Sarte Salceda said government should continue implement faster rollout of Covid-19 vaccine doses and mitigating measures against the Delta variant to sustain recovery on the second half of 2021.
“We’re not yet out of the hole, so we have no space or reason for complacency,” said the lawmaker.
“We’re still in the game for 7-percent GDP growth in 2021 but it’s no indication that people are having it easier economically,” added Salceda in response to GDP figures released on Tuesday.
National Statistician Dennis Mapa announced an 11.8-percent growth from April to June, reversing the 3.9-percent plunge logged in the first three months of 2021. The latest figure meets the expected double-digit growth by the economic team and analysts. It is also the highest since the fourth quarter of 1988 when the economy grew 12 percent.
In the first semester of the year, the PSA reported that the country’s GDP averaged 3.7 percent, using constant 2018 prices.
In a joint statement read by Socioeconomic Planning Secretary Karl Kendrick T. Chua, the President’s economic team attributed the recovery on the government’s policy to allow greater mobility to production sectors such as construction during the enhanced community quarantine (ECQ) period last March and April 2021. Metro Manila and huge parts of Calabarzon, however, have been placed anew under ECQ from August 6-20.
In Salceda’s view, the second-quarter growth record “is positive because it beats consensus estimates by a fully 1.4 percentage points. That’s not nothing. But we will see some roadblocks ahead, so we have to keep plowing forward with vaccination and other health measures. There is no longer any tradeoff between health and the economy here. If you can boost health, you will see the economy recovery.”
Salceda predicted that, “If we are able to stop Delta in its tracks and avoid the kind of surges Indonesia and other Asean neighbors are experiencing, we will perform very strongly in H2 [second half of the year],” he added.
Besides quick vaccination, Salceda said a strong second half will also require funding for genome sequencing, effective testing, treatment, and isolation, and some rhyme and reason to the contact tracing efforts.
“So, we can’t be complacent. Being out of the recession simply means we stopped our streak of negative growth. Our economy is still smaller now than it was pre-pandemic,” he said.
The solon also emphasized that the lockdown over the National Capital Region (NCR) and other nearby provinces will bear down on economic performance and “other hard lockdowns could hurl us back to the negative territory in the second half.”
“So we have to get the health aspects right so that we don’t always resort to the nuclear option of an ECQ,” Salceda said.
Senators weigh in
Meanwhile, in the Senate, a similarly cautious view prevailed, with senators citing the very real risks to growth, given the severe health challenge from the Delta-fueled case spike and the mobility restrictions’ strangling effect on business.
Senate President Pro Tempore Ralph Recto, responding to a query by the BusinessMirror on what it takes to sustain the second-quarter growth given the fresh lockdowns, reminded everyone that “government’s first job is to spend the budget as authorized by Congress.”
Recto added, “the government may consider additional stimulus directed to health, social protection, and loans for small business, at reduced rates.”
For her part, Senator Imee Marcos, who chairs the Senate Committee on Economic Affairs, noted that “the official narrative is that Q2’s 11.8 percent is the highest growth we’ve posted since Q4 of 1988.”
But, she added, “let’s get real: that apparent increase still condemns us to negative territory, relative to the 17-percent contraction of last year.” She stressed that it is “still a long way to go just to get back where we were before Covid.”
Meanwhile, she added, “we still have not learned the twin lessons of this ‘close-open, on and off’ pattern of dreaded lockdowns in the last 18 months.”
These options, she said, “only work if there is: 1) adequate social protection such as ayuda, and 2) a relentless medical response of aggressive vaccination, testing and treatment.”
Also, she added, “in the end, we need to generate jobs to fill the gap of lost economic activities or discover new ways such as e-biz [electronic or digital business] to adjust these activities during a lockdown.”
Marcos advised that “only by accepting that things will not go back to the old normal, and that we have to gear the economy towards a sustainable, digital and healthy new normal can we minimize the catastrophic disruptions engendered by these never-ending lockdowns.”
For her part, Senator Grace Poe pointed out that “economic growth may be at its highest since 1988 but let us not lose sight of the fact that still, it isn’t back to prepandemic levels.”
“We may have grown by 11.8 percent from the 17-percent contraction of last year but that’s nothing to brag about because much of it is base effect,” Poe said, adding: “What our people need urgently now is for the government to spend their tax money on the health sector by paying the hospitals and our health-care workers, while protecting and creating jobs.”
At the same time, Poe suggested: “Let us keep our people safe and ensure that there will be food on their table. Then and only then can these growth numbers mean anything.”
Sen. Joel Villanueva, responding to BusinessMirror’s query, replied: “We need to improve the management of the pandemic and control the spread of Covid-19.”
Villanueva stressed “that is the only we see how we can sustain the economic recovery,” adding his plea: “vaccines please.”
ECQ’s cost
Salceda estimated that the implementation of ECQ in the NCR will cost around P112.69 billion per week, while the imposition of a Calabarzon-wide ECQ will cost an additional P89.9 billion per week in foregone GDP.
He said the ECQ in Metro Manila will cost 439,000 jobs, while the Calabarzon ECQ will lose another 219,000 jobs, for a total net job loss of 658,000.
“This estimate approximates the Neda estimate of 440,000 jobs lost during the ECQ in NCR,” he said.
For his part, House Majority Leader Martin G. Romualdez on Tuesday credited the “spirit of teamwork and cooperation” between the government, public and private sectors as the one responsible for the country’s economic growth in the second quarter of 2021.
“We are on the right track in recognizing mass vaccination as the key to economic rebound. Despite limited global supply, our vaccination is picking up steam and is getting the results that we wanted for our economy,” Romualdez said.
Palace’s hope
Malacañang hopes the country can sustain its economic gains in the second quarter despite the current lockdowns.
In an online press briefing on Tuesday, Presidential spokesperson Harry Roque said: “We are happy we have this significant recovery in our economy and we are hoping that despite the two-week lockdown [in Metro Manila] will be able to recover during the last quarter.”
Roque noted the government deliberately implemented ECQ, the strictest classification, for the NCR this month in an attempt to contain the spread of infections before October and the start of the long Christmas season.
“The last quarter is traditionally the most lively time for the economy,” Roque said.
After the ECQ took effect last Friday, the number of daily new Covid-19 cases exceeded 8,000 cases per day.
Government officials earlier said they are eyeing to ease community quarantine restriction in NCR after its latest ECQ on Aug. 20, 2021 by vaccinating majority of its adult population.
As of Sunday, 3.89 million or 40.57 percent of the 9.6 million adults in NCR are fully vaccinated against Covid-19. With Samuel P. Medenilla
Image courtesy of Nonoy Lacza