PSA Philippines Consultancy Inc. Director for Business Intelligence Greg Wyatt
MANILA – The country’s sound macroeconomic policies provided “ammunition” to the Philippine government in its fight against the coronavirus disease 2019 (Covid-19) pandemic, an executive of a business consultancy firm said.
Gregory Wyatt, PSA Philippines Consultancy, Inc. Director for Business Intelligence said the Philippine government can afford to launch fiscal packages considering the country’s low debt-to-gross domestic product (GDP) ratio of 41.5 percent, while the Bangko Sentral ng Pilipinas (BSP) can further cut interest rates with the “relatively high” borrowing rate currently at 3.25 percent.
“The central bank and the government have ammunition while other countries don’t,” Wyatt said in a webinar organized by Nordic Chamber of Commerce of the Philippines on Wednesday.
He said some countries have a high debt-to-GDP ratio while other nations have low interest rates.
Wyatt backed the recommendations of local economists to introduce a robust fiscal stimulus beyond a traditional one.
“The traditional (stimulus) is getting people (to) spend again, solving the demand side problem of (the) economy. The fiscal stimulus we are hearing is protecting the vulnerable, saving people’s lives, and then the traditional stimulus could come later,” he added.
Meanwhile, Wyatt commended the government's emergency subsidy of up to PHP8,000 for 18 million low-income households for up to two months, saying this is higher than the recommendation by some economists of providing PHP2,000 per family per month.
The emergency subsidy is part of the special law signed by President Rodrigo Duterte on Tuesday for the government to aggressively address the Covid-19 crisis.
Wyatt said the Philippines will likely reflect the economic performance of some Asian countries, where there will be a quick and sharp return to the previous activity in the manufacturing sector while the services sector’s recovery will be much slower.
According to the National Economic Development Authority, the Covid-19 crisis is projected to cost PHP428.7 billion to PHP1.35 trillion and is affecting up to one million individuals in the workforce. (PNA)
