Ateneo economists raise fears of recession in COVID-19 onslaught, call for protection of the poor

Economists at the Ateneo de Manila University on Monday (March 23) called on the government and private sector to give priority to protecting poor households and health workers amid the COVID-19 pandemic.

“The negative impact of the enhanced community quarantine will be substantial considering that significant segments of the economy are going to stop,” the group said in a statement.

The statement by the Ateneo Center for Economic Research and Development (Acerd) and faculty members of Ateneo’s economics department said supply and demand would be choked by current quarantine rules.

“Curtailing workers and work mean no income for many,” the group said. “People are forced to use savings to maintain daily needs,” it added.

“This situation will lead to a severe decline in output. An economic recession for 2020 is not unimagineable,” the statement said.

The economic fallout from the enhanced community quarantine would require social protection measures for workers who were likely to lose jobs and health workers on the frontline, the economists said.

The group acknowledged that the government was the “only organized institution” that could best respond to the needs of the public health sector and vulnerable segments of the population.

The group urged the government to “take the lead in protecting economic assets particularly our human resources.”

During the pandemic, the economists said economic growth and profit should take a back seat to other measures needed by people.

“Economic stimulus to induce economic growth is not useful at this stage of the pandemic,” the economists said.

They cited a Department of Finance statement about the country having “enough resources to fund our 2020 budget.”

They said the government could divert and release “significant portions” of the budget to fund alleviation measures for the most vulnerable segment of the population.

The economists said the government must go on massive purchase of personal protective equipment, release more funds to pubic hospitals, enter into partnerships with the private sector, get technical support from China, fast track the release of Universal Health Care funds and “empower” local governments.

The group also called for a doubling of the P36.5-billion budget for the Pantawide Pamilyang Pilipino Program (4Ps) subsidy for the poorest of the poor.

Edited by TSB