PCCI urges immediate adoption of stimulus package to avert recession
The contraction of the economy in the second quarter by 16.2% sends a strong signal to government to accelerate the passage of stimulus measures and the full reopening of business activities, the Philippine Chamber of Commerce and Industry (PCCI) said in a statement today.
Reacting to recent data showing the country’s GDP slid by 16.2%, Amb. Benedicto Yujuico, president of the country’s largest business organization said, “That we will go into a recession is no longer surprising. I had advised our members not to expect the second, and maybe even the third quarter numbers to be better unless government acts fast to adopt and implement stimulus packages and allow the full resumption of economic activities.”
The extended lockdown has taken its toll on the economy Yujuico pointed out, adding, “Businesses will need substantial fiscal and non-fiscal support to survive and fully recover."
“We are 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,” Yujuico explained.
Smaller enterprise, Yujuico added, are already having cash flow and liquidity issues having to pay taxes, compounded rents, loans and interest charges, utilities and manpower, with negative returns.
Taking out loans may not even be an option anymore for these enterprises. “They are wary because it could lead to bigger loans,” Yujuico explained.
PCCI continues to bat for the P1.3 Trillion ARISE bill or the Accelerated Recovery and Investments Stimulus for the Economy even as the national government is set on the P140 Billion Bayanihan to Recover as One Act.
Yujuico noted that neighboring countries in the region whose economies have performed better than the Philippines’ own have allocated bigger budgets. Indonesia, whose second quarter GDP decelerated by 5.32% has a stimulus package amounting to US$ 47.6 Bn, Thailand at US$ 59.7 Bn and Vietnam, whose GDP fell at 0.36% and which most investors relocating from China are eyeing, has approved US$ 7.6 Bn.
Pointing out that extending the lockdown could worsen the woes of business from which they many never be able to recover even with fiscal support, Yujuico again urged for the full resumption of economic activities.