Congress urged to give ‘new normal’ economic policies a shot

To help speed up the sluggish recovery of the domestic manufacturing and foreign trade brought about by the country’s difficult battle against the COVID-19 pandemic, Congress must already pass long-delayed economic reforms, according to the Department of Finance (DOF). In an economic bulletin on Saturday, DOF Undersecretary and chief economist Gil Beltran said while the country’s manufacturing and external trade performance were improving as quarantine restrictions gradually eased, “recovery is not smooth.”

Beltran noted merchandise exports and imports remained in negative territory as of October, although not as bad as the 49.9-percent and 65.3-percent year-on-year declines, respectively, in April when 75 percent of the economy stopped.

The manufacturing purchasing managers’ index also fell to its lowest level of 31.6 in April, but reverted to growth by September just as exports also inched up year-on-year.

However, exports, imports and manufacturing again all contracted in October, which Beltran blamed on the prolonged quarantine.

“As long as lockdowns are in place, there will be hesitation on the part of consumers and investors to behave like they did before March,” Beltran said.

Economic managers had projected this year’s gross domestic product to shrink by a record 8.5-9.5 percent, before rebounding with a 6.5-7.5 percent growth in 2021 and a faster 8-10 percent expansion in 2022.

Beltran told the Inquirer early this month the economic team’s conservative growth projection for next year took into account the likelihood of the quarantine extending until early 2021 while awaiting vaccines.

As such, Beltran urged deep-rooted policy reforms to ensure adaptation to the economic “new normal.”

“Reforms such as Pifita (Passive Income and Financial Intermediary Taxation Act) as well as amendments to the Commonwealth-era Public Service Act and the Retail Trade Liberalization Act, can also help the country weather and recover from the impacts of the coronavirus pandemic,” Beltran said.