Economists to gov't: Spend P300 billion or more vs coronavirus
MANILA, Philippines – Filipino economists urged the government to spend at least P100 billion to P300 billion or even more on social protection and economic recovery programs to avert a recession amid the novel coronavirus pandemic.
The policy recommendation released on Sunday, March 22, was written by Alfredo Paloyo of the University of Wollongong in Australia, and University of the Philippines School of Economics faculty Cielo Magno, Karl Jandoc, Laarni Escresa, Maria Christina Epetia, Maria Socorro Bautista, and Emmanuel de Dios.
So far, President Rodrigo Duterte's economic managers have said they will be rolling out a P27.1-billion fiscal stimulus package to address the economic impact of the virus. More than half of the amount would go to the tourism sector, while around P4 billion is set for loans.
The economists disagreed with the government's strategy and argued that billions of pesos should be spent "to save people's lives, provide subsistence, preserve employment, and affirm social solidarity" during the Luzon-wide lockdown and scaled-down market activities.
"Under a community quarantine, it makes little sense to speak of a 'fiscal stimulus package,' an unfortunate choice of words. For in times like these, even Keynes must sit in quarantine," the economists said, referring to British economist John Maynard Keynes, who advocated government infrastructure spending to boost economies during unrest.
They recommended the following programs that need billions:
Distribution of cash and non-financial aid to the poor - An increase in payments to poor households already identified in the conditional cash transfer program must be done. (READ: 'Pantawid quarantine': Duterte gov't eyes release of P8,000 each for millions)
The government must act quickly in identifying new households that have been thrust into poverty by the pandemic so that the cash can be distributed to them too.
Food and non-food vouchers should be distributed to poor communities to be claimed at any supermarket or grocery. (READ: Businesses raise P1.5 billion to feed the poor during coronavirus lockdown)
Special attention must be paid to the nutritional needs of young children, as the current conditions may affect their physical and mental development.
Financial relief -A moratorium on foreclosures and utility payments during the quarantine period is needed, especially for households earning below a certain income threshold. (WATCH: 'No work, no pay' workers grind despite traffic, coronavirus threat)
These payments can be collected at a later date at 0% interest, and over an extended period.
Rolled over credit card debt should not incur any interest if the credit limit is below a certain amount.
Individuals should be allowed to withdraw contributions from the Social Security System, Government Service Insurance System, and Pag-IBIG up to P50,000 to be repaid over an extended period at 0% interest.
Companies should give workers their salary in full for the first two weeks of the pandemic, and then 80% of their pay thereafter.
Government can then provide subsidies to affected workers, including those whose wages are paid on a daily basis.
Sick leaves - Paid sick leaves should be extended to a minimum of 14 days for the duration of the crisis, with government covering 80% of the salary for the first 7 days and 100% thereafter.
Employees should work from home as much as possible.
Janitors and other support services of government agencies must be given their salary even if they do not report for work.
Loans for small businesses - The government should provide emergency loans to small and medium enterprises to incentivize them to retain their workforce.
The loans can be channeled through existing financial institutions with the support of the Bangko Sentral ng Pilipinas.
The following are their other policy recommendations:
Mass testing - More people must be tested for COVID-19, the disease caused by the coronavirus, with priority given to those at the highest risk and showing symptoms. (READ: Filipino scientists call on government to conduct mass testing for coronavirus)
The national government should anticipate the spread of the virus and allocate funds to provincial hospitals.
Relaxing rules on medical equipment and workers - Tariffs and non-tariff barriers that apply to personal protective equipment and other medical equipment to fight the pandemic should be suspended immediately.
Occupational licensing restrictions should be relaxed to allow nursing and medical students close to finishing their degree to assist in the efforts to combat the disease.
Preparing for hotel takeover - The national and local governments must stand ready to take over hotels, motels, and other accommodation services to use their beds should the health crisis require it. (READ: Vico Sotto readies Dahlia Hotel in Pasig as quarantine facility)
The military should be ready to build temporary treatment facilities to provide medical assistance through their trained medical personnel and engineers.
Securing supply chains - The necessary processes, including travel and production, for food and essential non-food items like water, electricity, medicine, packaging materials, soap, and disinfectants must be secured. (READ: Meat shortage looms in April if checkpoint issues persist)
For agriculture, the government must provide support to farmers, either through input subsidies or access to markets, so that they will continue to produce during this critical time.
When shortfalls become inevitable, the government should be ready to import more or incentivize the private sector to do the same.
Public transportation - The economists recommended that public transportation along arterial roads be made available, but with enhanced enforcement of physical distancing to the extent possible.
"Local governments, which have superior local knowledge, should be given the flexibility to manage their transportation requirements within reasonable bounds."
Compassionate containment - There must be strong coordination between the Metro Manila Council and neighboring spillover cities and municipalities for a coherent, comprehensive, and compassionate containment plan.
This ensures supply chains will not be disrupted, contract tracing will be more efficient, transboundary movement of workers will not be blocked, and information will be shared seamlessly.