Gov’t can handle debt, not another ECQ

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Acting Planning Secretary Karl Chua yesterday the country can pay off the new loans that it acquired from the World Bank and the Asian Development Bank (ADB) despite the economic slowdown it is experiencing due to the new coronavirus disease 2019 (COVID-19) pandemic.

At the Laging Handa press conference yesterday, Chua also indicated economic growth in the second quarter “will look really bad” compared to the first three months of the year due to the imposition of the enhanced community quarantine (ECQ)

“We can repay our loans,” he said, adding the country a good credit standing when the pandemic started.

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Last week the Department of Finance signed a $500-million loan with the World Bank and $400 million loan with the ADB.

Chua said prior to the pandemic, the Philippines was on its way to becoming an upper middle income country apart from being one of the fastest growing economies with an average of 6.6 percent growth from 2016 to 2020.

He said the country also had a BBB+ rating which is a notch below the A- rating.

Chua said the ECQ shut down 75 percent of the economy for the most part of the second quarter making the recovery “very uncertain.”

The economy shrank by 0.2 percent in the first quarter of the year.

Chua also reiterated the need to pass certain legislative measures to further strengthen the economy, boost the performance and financial standing of the different industries and eventually help the country get back on track to the pre-pandemic levels.

These measures include the Corporate Recovery and Tax Incentives for Enterprises, the Rural Agricultural and Fisheries Development Financing Systems Act, the Financial Institutions Strategic Transfer and Government Financial Institutions Unified Initiatives to Distressed Enterprises for Economic Recovery.

At the virtual general membership meeting of the Philippine Exporters Confederation Inc. early this week, Albay Rep. Joey Salceda said while it is easy for the economy to recover financially from the pandemic, “we cannot afford another lockdown.

Salceda said  “every 10 days of lockdown costs 2 percent of GDP.”

He said the country’s credit rating “is still okay.”

“Our problem is the 9.1 percent deficit in GDP when we thought we have a lot in savings,” he said.

Salceda, chair of the House Ways and Means Committee, said the second and third quarters will be the worst, but next year’s budget will be anchored on a growth rate of 9.1 percent.

In the same briefing, Health Undersecretary Rosario Vergeire said the country should be ready in the likelihood of a second wave of COVID infections.

The probability of a second wave happening will be known next week, Vergeire said.

Analyses of data gathered in the previous two weeks will show whether COVID cases increased and if they were caused by the easing of the lockdown. –with Paul Icamina

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