BDO Unibank Inc., the country’s largest lender, said government should accelerate spending to help the economy recover from its first recession in over three decades.
BDO chief investment officer Frederico “Fritz” Ocampo said increased public spending would help the Philippines grow an estimated 6.6 percent in 2021—a sharp turnaround from the pandemic-induced downturn this year.
“It would allow the economy to recover, and that would be the 2021 story,” Ocampo said during a recent virtual business forum organized by the BDO Trust Group.
Ocampo echoed statements made by economist and Marikina Rep. Stella Luz Quimbo on the government’s crucial role in bolstering consumer and business confidence.
“This is a situation where government must step in. If the government is not spending enough, then our confidence will be deflated,” Quimbo said during the webinar.
“We need government to spend because there’s a lot of market failures arising from the pandemic,” she added.
Quimbo is among the principal authors of House Bill No. 6815, or the Accelerated Recovery and Investments Stimulus for the Economy of the Philippines (Arise Philippines). The bill aims to provide a P1.3-trillion stimulus package to support economic recovery over the next four years.
Ocampo said government support would hasten the recovery alongside higher consumer demand, which accounts for over 70 percent, and increased investments from businesses large and small.
“While the growth drivers were hurt during the pandemic, the strengths of the Philippine economy remained intact,” he said.
He cited the country’s young and technology-savvy population.
“Later on … many of them would be creating their own companies and become entrepreneurs. Many jobs were lost during this pandemic. To cope, our young population would be creating their own companies,” he added.