Accelerated implementation of the Build, Build, Build infrastructure program and scaling up of food production and its logistics chain are two of five priority measures recommended by Finance Secretary Carlos Dominguez III to stimulate domestic consumption and get the economy back on track amid the coronavirus disease 2019 (COVID-19) outbreak.
Dominguez said the Build, Build, Build program is the “best driver of economic growth” and should be restarted subject to compliance with minimum health standards once mobility restrictions are lifted and COVID-19 is contained.
To reinvigorate consumer spending, Dominguez said government should promote the manufacture of products with strong and inelastic demand, notably by businesses involved in food production and logistics.
Another of the recommended priority actions, according to Dominguez, is support for the whole value chain of food production, including establishment of food markets for efficient distribution—similar to the fruit and vegetable markets established decades ago in Japan—where farmers can directly sell their produce to consumers.
Completing Dominguez’s five-point program is mass hiring of contact tracers to boost government efforts to stop local transmission of COVID-19, while providing jobs; and urgent passage of the Corporate Income Tax and Incentives Rationalization Act (CITIRA), which should now include “flexible tax and non-tax incentives” so government can better target specific investors.
“We have to stimulate demand, and that’s with ‘Build, Build, Build’ and push[ing] food production,” Dominguez said during the May 11 meeting of the Inter-Agency Task Force on the Management of Emerging Infectious Diseases (IATF).
Dominguez pointed out that the infrastructure program “remains to be the best driver of economic growth because it has the best multiplier effects in terms of employment and shared prosperity.”
“The Duterte administration’s economic team and our legislators are finalizing an economic recovery program that will help us combat the pandemic and provide industries, especially micro, small, and medium enterprises (MSMEs), the assistance they need to get back on their feet and our fellow Filipinos back to work,” Dominguez said during the meeting.
But even before this economic recovery program is finalized, Dominguez said the government should take the lead in stimulating consumer demand to help businesses survive and keep the economy afloat.
Dominguez said it would be useless to provide relief to businesses if demand remains weak and consumers lack the means to buy their goods and services.
During the televised briefing, Dominguez asked the President’s support for swift Congressional approval of the CITIRA bill by June 3, or before the sine die adjournment of the Legislature.
The CITIRA bill was approved by the House of Representatives in September 2019, but remains pending in the Senate.
Enacting the CITIRA will attract foreign investors who want to relocate from other countries and are in search of resilient, high-growth-potential economies like the Philippines, Dominguez said.
The mass hiring of contact tracers will help offset the impact of the estimated 1.2 million to 1.5 million job losses resulting from the economic fallout triggered by the COVID-19 pandemic.
“We need to hire enough contact tracers to match the numbers we expect that will come with more testing,” Dominguez said.
Dominguez remained optimistic the economy can get back on its positive growth trajectory, even though first-quarter growth contracted by 0.2%.
He said conservative economic policies and pursuit of economic reforms, such as tax reform, rice tariffication and the increases in so-called “sin” taxes, have kept the country’s financial position strong.
Photo courtesy of Ace Morandante/Presidential photo