MANILA - The head of Ayala Corp on Tuesday said the country’s recovery from the disruptions of the COVID-19 pandemic will likely be uneven, with big companies quickly bouncing back while smaller businesses continuing to face challenges.
This was in contrast to the projection of the Department of Trade and Industry which sees a strong V-shaped recovery next year.
Jaime Augusto Zobel de Ayala, chairman and CEO of Ayala Corp, said certain sectors of the economy, particularly white collar workers, technology and large corporations may see an immediate and strong recovery. But he also warned that blue collar workers, small businesses and the poor may see an extended decline, and would need further support.
“We recognize that the recovery in our country will not be the same for everyone. In fact, we already see today that while capital markets are open to large, established institutions who thus have more options to endure the downturn, the drop in consumer demand has left many MSMEs in a more challenged position,” Zobel said during a virtual forum on foreign investment in the post-pandemic Philippines.
“Those already most vulnerable stand to become even more so,” Zobel told participants in the 9th Arangkada Philippines Forum.
An international consultancy group also said that inequality may worsen because of the pandemic.
“There are classes which cannot cope,” said Kaushik Das, managing partner of McKinsey & Company’s Southeast Asia, saying that their surveys showed that not all consumers could keep up with the changes caused by the pandemic.
Das also said a survey of corporations showed that most companies do in fact expect the economic recovery to be L-shaped, indicating a longer recovery period, or hockey stick-shaped, indicating a long period of stagnation before a slow recovery.
He added that the economic recovery of the Philippines may lag behind that of the rest of the major ASEAN economies.
Trade Secretary Ramon Lopez meanwhile said he was optimistic of a strong recovery next year, with the expected passage of a law that will reduce corporate income taxes, as well as the country’s entry into the Regional Comprehensive Economic Partnership, which is the world’s biggest free trade bloc.
“RCEP is further expected to strengthen the Filipino advantage,” Lopez said during the forum.
Zobel said that for the economy to recover, there must be strong support of the country’s health system, policy reform and public sector support for business, and efforts to improve consumer confidence.
The head of the Philippines’ oldest conglomerate said a large-scale COVID-19 vaccination program is central to the reopening of the economy. A multi-vaccine portfolio and a multi-year program by both the public and private sectors is needed, Zobel said.
The Bangko Sentral ng Pilipinas has cut its policy rate to a historic low this year in an effort to prop up the economy, which slipped deeper into recession following an 11.5 percent contraction in the third quarter.
Philippine business leaders have said more government spending is needed to stimulate the economy.
- Report from Warren de Guzman, ABS-CBN News