The new coronavirus disease (COVID-19) pandemic that has left millions of workers suddenly jobless is now turning into an economic crisis, and a large number of business groups fear this might soon lead to social tensions and even violence.
To deal with this, 32 business groups are urging Congress to spend more money and help vulnerable communities, even if this means spending more than what the country earns.
Doing so would ultimately mean higher debt for the country, but if their estimates were right, their proposal to the government could have about P280 billion to stimulate the economy during this period, they said in a statement.
This fiscal stimulus package is several times larger than the P27-billion COVID-19 relief plan earmarked by the Department of Finance, which would mostly aid the tourism sector.
But as the groups put it, the lockdown on Metro Manila and the rest of Luzon imposed by President Duterte will impact millions of workers, be they regular workers laid off by companies that could no longer support them, or informal workers who suddenly couldn’t make a living because of strict quarantine measures.
They said the government has the ability and the responsibility to adopt a fiscal stimulus program that would raise the country’s deficit-to-GDP ratio to close to 5 percent. GDP, or gross domestic product, is the total value of goods and services produced by the economy.
A higher deficit-to-GDP ratio, simply put, means it might be difficult for a country to pay off its debts, which raises the risks for financial institutions that would have lent it the money.
Although this rate is usually a red flag, the group said credit watchers “will probably relax as an unprecedented number of countries buttress their economies.”
This is much larger than the latest programmed budget deficit of 3.6 percent. It remains to be seen if the economic managers would agree to their proposal.
“Many companies are doing what they can to keep their employees paid despite their inability to work and drastic declines in sales. But they can only do so much compared with the millions who are vulnerable to the downturn,” they said.
The Philippine Retailers Association is among the signatories, along with Philippine Chamber of Commerce and Industry, Employers Confederation of the Philippines, Federation of Filipino Chinese Chamber of Commerce and Industry Inc., Philippine Center For Entrepreneurship/Go Negosyo, Management Association of the Philippines, Makati Business Club, Philippine Franchise Association, and PHILEXPORT among others.
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