MANILA - The government needs to further ramp up spending to stimulate the economy even if this means the country’s debt will further rise, a member of the House economics panel said on Tuesday.
Marikina Rep. Stella Luz Quimbo, a member of the House Committee on Economic Affairs, said stimulus spending was needed as the economy stands to suffer more losses as Metro Manila reverts to modified enhanced community quarantine (MECQ).
Quimbo, who taught economics at the University of the Philippines, said the country had so far already suffered P2 trillion in losses due to the pandemic.
She calculated that the economy would lose another P12 billion a day during the 2-week MECQ imposed over Metro Manila and some of the most economically productive provinces of the country.
Quimbo was one of the authors of the P1.3-trillion spending bill called ARISE or Accelerated Recovery and Investments Stimulus for the Economy of the Philippines.
Congressmen approved the bill on final reading in June, but economic managers thumbed it down saying there were no funds for it.
She said the government should not be too worried about raising the debt levels as the Philippines has a very good credit rating.
“Let’s use it precisely for taking out credit because today is not only a rainy day, today is a stormy day. Talagang mabigat po ang pangangailangan natin (Our need today is truly great),” Quimbo said in an interview with Teleradyo.
She said the Philippines’ economic fundamentals remain strong, as evidenced by the appreciation of the peso because of the country’s foreign exchange reserves.
Quimbo said that while she agrees that the 2-week lockdown of Metro Manila is necessary as health workers themselves called for this due to the surge in COVID-19 cases, the government should be looking at how to mitigate the damage to the economy.
The economy shrank 0.2 percent in the first quarter, due to the pandemic and the lockdowns.
Economists said an even worse contraction happened during the second quarter. Official GDP figures will be announced Thursday, Aug. 6.