QUEZON CITY, July 8 (PIA) -- Department of FInance (DOF) Secretary Carlos G. Dominguez reported the financial challenges the country experienced this first semester and reveals the Department's plans for economic recovery in today's pre-State of the Nation Address (SONA).
Dubbed the "Tatak ng Pagbabago 2020: The Pre-SONA Forum," this year's three-part forum series is a platform for Cabinet officials to discuss key policies and programs in greater detail in preparation for President Rodrigo Roa Duterte's SONA.
As the kick-off session, the country's chief finance manager delivered the report of the Economic Cluster via live streaming on the official Facebook pages of PCOO, Radio Television Malacanang (RTVM), and various government agencies.
Dominguez explained that this pandemic is something none of the countries worldwide have anticipated and prepared for yet the Philippines didn't cower.
"This pandemic is a 'black swan' event that no one fully anticipated and was truly prepared to deal with. But we did not fold and run in the face of an unprecedented crisis," he said.
The President's early and decisive measures to combat the contagion saved thousands of lives, which experts say would reach 1.3 to 3.5 million infections by June if the lockdown wasn't imposed.
"Imposing the enhanced community quarantine not only slowed the virus' spread, when it could have grown exponentially faster. The lockdown gave us time to expand our testing capacity by multiples," he explained.
The lockdown, he said, bought time for the government to expand the country's capacity to treat and isolate the infected but it came with a heavy price.
"Our unemployment rate in April of this year spiked to 17.7 percent. Similarly, the shutdown of economic activities has taken its toll on businesses," Dominguez said.
Tax collections dropped by Php1.2 trillion, the deficit-to-GDP ratio will likely more than double as a result, but emergency spending scale up to support the country's healthcare system and provide relief to different sectors hit by the pandemic.
"We need to fund our economic recovery plan, especially for small businesses. We will bridge the gap with additional borrowings," he said while enumerating close to US$7 billion foreign loans and grants in COVID response.
But the chief finance manager believes that although COVID cases in Metro Manila and CALABARZON keep on increasing, they account for 67 percent of the country's economy and it is vital for them to reopen.
"The reality is that this virus will not go away until a vaccine is found... We need to strike a reasonable balance between safeguarding public health and restarting our economy," he said emphasizing that health and livelihood is not a binary choice.
"We must protect lives in ways that do not prevent us from earning a living. This is a tough decision to make but we need to do this," he added.
To rev up the economy, he revealed the government's recovery plan, which is a result of an extensive nationwide survey as well as continuous engagement with thousands of stakeholders through Sulong Pilipinas workshops with youth and business leaders.
First, by seeking Congressional approval for infusing additional capital to government financial institutions, the DOF aims to enable GFIs to act as wholesale banks and fund substantial portions of loans that other commercial banks will provide to micro, small and medium enterprises adversely affected by the pandemic.
Second, DOF seeks to allow banks to dispose of non-performing loans and assets through asset management companies similar to special purpose vehicles.
Third, he urges the Senate to pass the Corporate Recovery and Tax Incentives for Enterprises (CREATE) Act that will reduce corporate income taxes for the majority of small- and medium-sized businesses by 5 percentage points immediately.
Finally, DOF seeks to provide greater support to the agriculture sector by giving the banking system the ability to support the whole value chain of agri-enterprises.
"We will never take the threat posed by the pandemic lightly. Be assured that the Duterte administration will protect our economic gains, support our recovery, strengthen our resilience, and bring us back to the path of inclusive and shared prosperity," he said while also seeking everyone's cooperation in helping curb the spread of the virus.
"We are asking all Filipinos to cultivate in themselves a renewed sense of confidence through continued vigilance-not out of fear, but with the knowledge that most factors of viral transmission are under our personal control," he said. (MTQ/PIA-IDPD)