MANILA - Finance Secretary Carlos Dominguez III said the local economy will need "more years" to go back to its pre-pandemic levels as the country continues to stagger from the impacts of COVID-19.
"To be honest we cannot recover all that we lost in 2020 in one blow. It will take us more years to nurse our economy to where it was before the pandemic struck," Dominguez said during an online forum on Friday.
The country recorded its worst economic recession last year, shrinking 9.5 percent due to the effects of COVID-19.
But Dominguez assured that government has more than enough financial support to keep the economy afloat amid lingering uncertainties from the pandemic.
"We are prepared to fight a long battle, exercising prudence over the use of our fiscal resources. The worst we could do is to run out of water before the fire is out. We could, for instance, be administering vaccines for years until the virus is extinct," Dominguez said.
Bangko Sentral Governor Benjamin Diokno said the central bank will provide aid to the economy through policy and funding, if needed.
"Rest assured that the BSP stands ready to extend the same set of policy measures implemented in 2020 to support the economy as needed," Diokno said.
The BSP has pumped close to P2 trillion in liquidity to the Philippine financial system last year, through a series of benchmark rate cuts to a record low of 2 percent and other non-monetary policy measures.
The World Bank expects the Philippine economy to grow 5.9 percent this year. The Asian Development Bank has a faster projection of 6.5 percent, while the International Monetary Fund sees a 6.6 percent growth.
Other financial institutions, meanwhile, expect growth to be as low as 6.1 percent and as high as 9.6 percent for 2021.
To ensure a strong recovery, Eduardo Francisco, president of BDO Capital Investment Corp., said the government should fast-track the full reopening of the economy, especially as micro, small, and medium enterprises (MSMEs) fight to survive amid the ongoing mobility restrictions.
"The big companies are going to rebound. The bigger problem is really what about the smaller companies. We are not even talking about rebounding, we're talking about can they survive," Francisco said.
Dominguez said Congress recently passed the Corporate Recovery and Tax Incentives for Enterprises (CREATE) bill that will reduce the tax of MSMEs to 20 percent from 30 percent.
CREATE is awaiting the approval of the President to be enacted into law.
"Sure, the taxes will go down to 20 percent but if you don't even have a business to run or you're in losses anyway, lower taxes don't mean anything," Francisco said.
Meanwhile, former Finance chief Jose Isidro Navato Camacho said economic managers have done their part, but the government in general "failed miserably" on the health side -- across testing, tracing, response and now, the vaccination.
"Government has to get its act together on the health side to give confidence to the people," Camacho said.
The Philippines is poised to be the last country in Southeast Asia to take in deliveries of vaccines against COVID-19.
The country is expecting to receive 600,000 doses of donated Sinovac vaccines from China soon.
However, Camacho said these doses are "not going to move the needle" with the government's target to vaccinate 100 percent of its adult population or 70 million individuals in 2021.