BY JOHNNY DAYANG
Fiscal managers, using the jargon that appeals most to them, have not satisfactorily examined the repercussions the depression the Philippines is in today. Though such term refers to the deficiency the country has suffered in two consecutive quarters, the likelihood of getting a third shortfall may bring the country to a more drastic economic downturn.
Recently, the Philippine Statistics Authority (PSA) said the economy narrowed by 16.5% in the second quarter, i.e., from April to June. In contrast, it experienced a downward trend of 0.7% in the first quarter. On a year to year basis, the second quarter of 2019 listed a 5.4% uptick.
Government fiscal planners and managers, however, are optimistic that despite the barrage of letdowns the pandemic has created, the Philippine economy will not fall into recession.
This bit of bad news, however, does not sit well with economists who blame the nosedive to the State’s failure to calibrate its fiscal expenditures during the pandemic and its failure to introduce measures that would have mitigated the difficult issues arising from the rush to borrow money to tide over the displacements created by the emergency.
To cushion PSA’s nerve-jarring report that the Philippines has again become the ‘sick man of Asia,’ the central bank, in a well-timed announcement issued days later, declared that the country’s foreign exchange reserves is nearing the $100-billion mark. Moreover, it announced that the country’s net international reserves, the difference between gross reserves and total short-term liabilities, rose by $4.52 billion to $97.99 billion in July, up from June’s $93.47 billion.
These opposing performances, though, do not show the dark side on what to expect given the shaky direction of the Covid-19 menace. On the side, as the country battles uncertainty, the loudest issues needing resolution are health, jobs, and food; these are matters that can drastically impact fiscal stability and monetary resources.
Despite brighter predictions of an economy with tools to rebound from the plague, the displacement of close to half a million OFW dollar-earners has solid effect in the way the foreign reserves will behave. With the overdrive necessary to put the economy on full speed, the state economists have also to contend with the huge foreign debt incurred in the past few months.
That we are in an economic depression does not bode well for us. With 27.3 million people surveyed to have been displaced from their jobs, the rising struggle to keep the country afloat and, by extension, see it inch its way back to where it was in pre-pandemic growth level, can be a complicated journey.
