“I agree we have to be thrifty with money because of the uncertainty in front of us. But we are at an impasse and the only way out is a fiscal stimulus,” said Marikina Rep. Stella Quimbo, head of the House of Representatives’ panel on economic stimulus, in an interview with Bloomberg.
“Instead of saving for a rainy day, which we don’t know when will come, the government must have a plan to control the virus so it can program its spending to stimulate the economy,” said the former professor of the University of the Philippines School of Economics.
Quimbo said the Philippines needed a massive injection of P1.56 trillion – mostly in wage subsidies and low-cost loans – soon to prevent the country from going deeper into red after falling in two consecutive quarters (including a 40-year worst 16.5 percent drop in gross domestic product in the second quarter) and all-time high unemployment of 17.7 percent or 7.3 million as of April 2020.
“It’s consumption reduction that caused the contraction pretty much. If we don’t address the loss of jobs and people don’t have money how do we recover? Government has to spend so that confidence comes back,” said Quimbo.
But Dominguez, whose ambition is to leave a legacy of credit rating excellence, is not budging from what Quimbo called a “piecemeal” approach to saving the economy.
Dominguez is adamant on limiting any stimulus spending to P140 billion this year as he preferred to wait until next year to increase government spending in line with his obsession to maintain borrowing curbs this year.