A study conducted on the Philippine economy has noted the crucial role of manufacturing and wholesale-retail trade during pandemic.
Government services rounded up the top three economic sectors that are critical during the pandemic, based on “Mitigating Economic Losses from COVID-19: Insights from Input Output Analysis.”
The research, which looked at the economies of both Malaysia and the Philippines, analyzed the five factors: economic impact, connectivity, sector size, income multiplier, and employment.
“When a firm goes bankrupt, it disappears from the economic picture. The question is, how far below normal can a certain economic sector dip, because percentage-wise, below a certain threshold level, bouncing back to pre-pandemic level becomes difficult or even impossible,” said Raymond Tan, a professor at DLSU and member of the research team.
The tourism and travel industry is one of the extremely hard-hit sector this pandemic, but sectors such as telecommunications, finance, logistics and delivery are booming.
The study said the enhanced input-output model of analysis can help the government identify the critical economic sectors to be prioritized, so that given the limited resources, the government would know where to distribute the stimulus package across sectors of the economy to maximize the benefits.
The team presented several scenarios for computer-aided allocation of economic stimulus, a scientific approach to maximize the social benefits per peso spent.
Effective exit strategies are needed to revive economies during the pandemic, the study added.