Former Bangko Sentral ng Pilipinas Deputy Governor Diwa Guinigundo called on the government to tap private sector support and digital technology to boost recovery efforts from the coronavirus pandemic.
“It is primary for the government to show that pandemic management receive its priority alongside economic activity. The crisis is basically pandemic-induced, and therefore the civil society expects no less than good efforts on the part of the government and the support of the private sector,” Guinigundo said at the virtual Pilipinas Conference 2020 organized by Stratbase Albert del Rosario Institute on November 23, 2020.
Guinigundo also challenged the government to increase public spending on healthcare services. “Let me again reiterate the fiscal policy should not be timid in this particular issue,” he said.
He said that while the BSP has done enough in terms of monetary stimulus, having released P1.8 trillion into the financial system, it should monitor and talk to the banks to avoid procyclicality or fluctuations.
Guinigundo said it is also important to pursue a digital push in terms of public health as he cited the example of Vietnam which was able to contain the virus with its very good use of technology in pursuing testing, tracing, quarantining and treatment.
He said digital support is also needed for education. “Doing this and providing our children with enough support on the digital side is the way to go,” he said.
Guinigundo said the economy continued to suffer from the impact of the pandemic. “Let me reiterate the obvious, we are in deep recession,” he said, noting that the gross domestic product shrank 0.7 percent in the first quarter, 16.9 percent in the second quarter and 11.5 percent in the third quarter,” he said.
“It is too early to claim victory into the recession. People are smarting into this pandemic. It will be too ambitious to expect them to resume their usual business activities. Savings must have been drown down, investments must have been grounded into a halt and business activities also. There are frictions, outputs have been lost, jobs have been lost, productivity will need time to gain momentum,” he said.
He said the government should demonstrate the primacy of pandemic management alongside the restart of economic activities and should increase the budget for health, education and infrastructure, with due consideration to actual absorptive capacity given the cycle of the seasons.
Guinigundo also cited the need for the digital push on goods and service delivery, payments and settlements. “In short, the nurture of the new normal or new economy should be pursued,” he said.
He said while there are “green shoots” or initial signs of economic activities, they remain tentative. He said because the crisis is pandemic-induced, restoring confidence would be very crucial.
“The hit on the economy is pandemic induced. As such it is important that confidence is immediately restored. It would be unrealistic to presume that we have already flattened the pandemic and economic activities are on their way to recovery. A resurgence can reverse any initial gains,” he said.