Philippine economy could contract if coronavirus crisis drags, stimulus 'good' for now: Pernia

ABS-CBN News

Posted at Mar 24 2020 10:39 AM

A child watches as authorities disinfect Barangay West Crame, San Juan City on March 23, 2020 to guard against the COVID-19 pandemic. George Calvelo, ABS-CBN News

MANILA -- The Philippines' billion-peso stimulus package against the coronavirus pandemic is "good enough" for now, the socioeconomic planning chief said Monday, adding that it was "possible" for the economy to contract should the crisis persist until June.

Gross domestic product could register negative growth of 0.6 percent to an expansion of 4.3 percent, depending on how long the lockdown of Luzon will last, said Sec. Ernesto Pernia, director general of the National Economic Development Authority.

The Philippine economy last contracted, by 0.6 percent, in 1998 during the Asian financial crisis, according to ABS-CBN Data Analytics.

Luzon, which is on lockdown until April 12, accounts for 75 percent of the economy, Pernia told ANC's Market Edge. The island region is also home to half of the Philippines' 100 million people.

Lawmakers approved before dawn on Tuesday a response package that will, among other, provide P5,000 to P8,000 monthly aid for 2 months to poor families, P100,000 for every health worker who contracted COVID-19 and P1 million for every health worker who died from the disease.

The measure, once signed into law, will allow President Rodrigo Duterte to realign spending in the current P4.1 trillion budget and "direct" operations of private hospitals and pubic transport.

"Under these extraordinary times, we need special powers. We don't have an alternative," Pernia said.

"To begin with, I think it's good enough," he said. "We just need to monitor closely, watch everyday so we can make the adjustments necessary."

Pernia said taking out a provision in a draft bill that called for a"takeover" of some businesses was the "correct" thing to do. "It's not good to have powers to dictate the private sector right away."