July 16 ------ The invisible coronavirus enemy may have taken a toll on people’s health and livelihood but the economy has started to show signs of recovery, Cabinet Secretary Karlo Nograles said on Wednesday. Nograles highlighted the country’s improving economic situation during the second virtual pre State of the Nation Address (SONA) forum, citing an increase in revenue collection and stable credit ratings.
“Mga kababayan, hirap man tayo ngayon, may mga senyales din na lumalaban at bumabangon ang ekonomiya (My countrymen, we may be living in hard times now but there are signs that the economy is fighting and recovering),” he said. “Tumaas po ng 4.4% ang mga koleksyon ng Customs (The Customs collection increased by 4.4 percent) – evidence of increasing economic activity,” he added. Foreign credit rating agencies have also affirmed the country’s sovereign ratings and kept them at investment grade levels “even amidst the pandemic,” according to Nograles. Before the coronavirus outbreak, Nograles said the country secured a BBB plus credit rating, the highest in its history.
The Japan Credit Rating Agency Ltd. (JCR) also upgraded the country’s rating by a notch from BBB+ to A- that showed the confidence in the country’s economic resilience, he added. Use good credit standing With the country good credit standing, Senate President Pro Tempore Ralph Recto and Minority Leader Franklin Drilon said the government should borrow more money to continuously fund its response to the COVID-19 pandemic and shore up the economy.
Recto said the government should use its good credit standing to take advantage of credit financial facilities available. Recto urged state economic managers to consider it while interest rates are still very low. “What good is having a good credit rating if we don’t use it? Let’s use it wisely,” Recto said. “We can increase our borrowings without affecting our credit rating if we spend it properly by improving our ability to combat the virus (health infrastructure) and investing on critical infrastructure (roads, bridges, ICT, green economy, etc.) that creates jobs and improves our competitiveness in the long run,” Recto added.
Drilon agreed with the proposal, reiterating that the country needs as much money to spruce up the economy and at the same time address the current health crisis. “Remember that during this pandemic, our tax collection went down, and therefore, we have no funds,” Drilon said during the Kapihan sa Manila Bay online forum. “But that’s accepted. That is why there is a push to have more funds through borrowings because we really have no other choice,” Drilon said.
The Department of Finance (DoF) had earlier said COVID-19 related borrowings have so far reached $4.83 billion and these have been disbursed for State programs aimed at containing the spread of the pandemic. Among the financial institutions that extended loans to the Philippines are the Asian Development Bank (ADB) with $2.6 billion, the World Bank (WB) with $1.2 billion, the Asian Infrastructure Investment Bank with $750 million, and Agence Française de Développement with $275.7 million.
Invisible enemy Nograles acknowledged that the country is in the middle of a coronavirus battle “that is claiming lives and taking its toll on the health of our people.” “They emphasize that we face an invisible enemy that has far reaching consequences on the lives and livelihoods of every Filipino man, woman, and child,” he added. Apart from affecting public health, Nograles recognized the extent of damage dealt by the virus on the country’s economy, including the spike in the April unemployment rate to 17.7 percent and slowdown in economic activity and tax collections.
“Ang mga numerong ito, bukod po sa mga daily update ng DOH, ay nakakabahala,” he said. Nograles assured that the government has long laid the groundwork for economic recovery for the country. Prior to the pandemic, he said the country has one of the most resilient economies in the region due to the government’s fiscal and economic management. Social protection In mitigating the impact of the pandemic on the people, Nograles said the government will take steps to provide the country’s most vulnerable sectors with the social protections “to survive and thrive in the months ahead.” These government programs were discussed by members of the Cabinet clusters on human development, poverty reduction, and participatory governance during the pre-SONA forum.