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No KO punch for COVID: Dominguez sees light at end of tunnel with free falling economy showing signs of life

Chill.

This is the message of Finance Secretary Sonny Dominguez to his critics calling for a huge stimulus program in response to the country’s economic meltdown during the lockdown.

“We are beginning to see the light at the end of the tunnel…Improvements are seen in the manufacturing sector as the economy gradually reopens.” assured Dominguez after the Philippines posted its worst decline in gross domestic product in roughly two generations.

While key indicators have plunged across the board, Dominguez the rate of decline has slowed down in the last month of the second quarter:

* Value of production index fell 22.5 percent compared to the 31.2 percent decrease in May and 41.2 percent in April

* Volume of production index shrank 19.3 percent in June versus 28.5 percent in May and 38.8 percent in April

* Total trade slipped 19.9 percent in June versus 35.3 percent in May and 59.5 percent in April

* Overall manufacturing capacity reached 73 percent in June from 72.4 percent in May and 70.5 percent in April

He said signs of a return in economic activity could also be seen from the government’s revenue collections:

* Bureau of Customs surpassed its July collection target by five percent due to higher import volumes and sustained above-target performance in June.

* Bureau of Internal Revenue exceeded its July collection target by two percent with excise and value-added taxes, indicators of consumer spending, picking up steam.

Dominguez is sticking to his strategy not to spend more than P140 billion under the Bayanihan to Recover as Once Act, or the Bayanihan 2, which is just a fraction of the P1.3 trillion being pushed in the House.

“When Senator (Manny) Pacquiao trains for a fight, he prepares for 12 grueling rounds. As there can be no knock-out punch that cuts our fight short before the vaccine is developed, the government’s ability to sustain the fight depends on our fiscal stamina. We have the resources necessary to endure this challenge, but we must also conserve our resources for succeeding rounds of this fight,” said Dominguez.

“The COVID crisis will be a drawn-out series of battles and the war will only be conclusively won with the development and wide availability of a vaccine,” he added.

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