Infra spending to revitalize economy amid pandemic

RCBC chief economist Michael Ricafort


MANILA – Increased government infrastructure spending is more needed now after the implementation of stricter quarantine measures in the National Capital Region (NCR) and four nearby provinces from March 22 to April 4, 2021.


The government, through the recommendation of the Inter-Agency Task Force (AITF) on Emerging Infectious Diseases, implemented stricter general community quarantine (GCQ) for the National Capital Region (NCR), Laguna, Rizal, Cavite and Bulacan for two weeks to help address the surge in coronavirus disease 2019 (Covid-19) cases. 


In a reply to e-mailed questions from the Philippine News Agency (PNA), Rizal Commercial Banking Corporation (RCBC) chief economist Michael Ricafort said “tighter restrictions could slow down economic recovery.” 


“The resulting reduction in the capacity and scale of some affected business and industries, somewhat reverting back to levels a few weeks ago, would slow down the pace of economic recovery,” he said.


Ricafort said the recent upticks in Covid-19 infections, with the March 22 figure at record-high of 8,019, “would also result in less people going out as a matter of prudence and would result in reduced consumer spending and slower pick-up in economic/business activities.” 


He said while the latest measures are stricter compared to recent weeks, it is still “milder” compared to those implemented last year since it aims to “lower new Covid-19 cases and better manage Holy Week, which is a potential superspreader event as people travel, meet, and congregate, while keeping the economy as open as possible while observing strict health protocols.”


“Thus, government spending especially on infrastructure would be needed more to pump-prime the economy, as a result, also in preparation for the 2022 presidential elections a little over a year from now,” he added. 


Ricafort said “reduction in new Covid-19 cases and further arrival and rollout of Covid-19 vaccines would be key to further justify reopening of the economy to support economic recovery prospects.”


Meanwhile, Finance Secretary Carlos Dominguez said his department “has always advocated a policy of conserving all our resources in anticipation of a recurrence of the contagion, in order for the country to be able to make the appropriate response at any given time.”


“We will examine all available facts and weigh the knowledgeable opinions from domestic and international sources to arrive at a recommendation for action,” he added. (PNA)


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