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Duterte Fails to Provide a Detailed Economic Recovery Plan

  • Philippine President Rodrigo Duterte asked lawmakers to implement stimulus policies to revive an economy on the verge of a recession caused by a coronavirus lockdown that is one of the most stringent and longest in the world.
  • Analysts, business leaders, and lawmakers from the opposition said he had not stated how exactly he was planning to do it.
  • He asked lawmakers to fast-track the second version of the bill that would give him special powers to deal with the pandemic, including realigning government funding.
  • Visit The Financial Today’s homepage for more stories.

On Monday, Philippine President Rodrigo Duterte asked lawmakers to implement stimulus policies to revive an economy on the verge of a recession caused by a coronavirus lockdown that is one of the most stringent and longest in the world.

Analysts, business leaders, and lawmakers from the opposition said he had not stated how exactly he was planning to do it.

The tough-talking Philippine leader dedicated the first hour of his nearly two-hour state of the nation address to commending the State’s response to the pandemic and encouraging Congress to support its economic recovery program.

“We must facilitate the country’s economic recovery,” Mr. Duterte said in a speech at the House of Representatives, where about 50 VIP politicians gathered to hear him address the nation. The remainder of his audience consisted of secretaries from the Cabinet, senators, and congressmen, and officials from the local government who listened in from various Zoom Cloud meetings.

He asked lawmakers to fast-track the second version of the bill that would give him special powers to deal with the pandemic, including realigning government funding.

The first law that has since expired let him realign about P275 billion to state programs against the coronavirus. The second measure aims to let him allocate another P140 billion for various programs for the health emergency.

President Duterte vowed not to rush the reopening of the economy, saying the good “would be outweighed by the bad it will generate.” “Haste makes waste, the recent surge of infections when you open little windows of resumption of business are proof of that.”

President Duterte also requested Congress to hasten approval of the bill aimed at immediately lowering corporate income tax from 30% to 25%, while giving the government the flexibility to grant both fiscal and non-fiscal incentives.​

He also sought approval of the measure that would require banks to transfer bad loans and assets to asset management firms.

“Many of the points he emphasized were old talking points—drugs, criminality, and corruption,” said Herman Joseph Kraft, an associate professor and chairman of the University of the Philippines’ Political Science department.

“There were a number of potentially inconsistent declarations. He threatened to close down telcos while at the same time emphasizing the need to switch to online modalities in government service and education,” he added.

Kraft also said that the President had not outlined a national strategy to fight the COVID-19 pandemic. “There was no clear statement about this, just aspirations about increasing testing.”

The government is hard-pressed to come up with a plan for economic recovery as the Philippines faces its worst downturn in three decades after companies were shut down and consumption weakened.

In the three months through March, the economy shrank by 0.2 percent, the first contraction after more than two decades of growth, and in April the unemployment rate reached an all-time high of 17.7 percent. Economic managers anticipate that this year, in a deteriorating fiscal climate, economic production will fall as much as 3.4 percent.​

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[BusinessWorld]

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