"Management, fiscal policy, consumer sentiment"
There are many things that people still don’t know about the virus that has been virtually ravaging the whole universe. But some things they have come to know, and one of these is that dealing with the economic crisis that the coronavirus has created is a three-part matter. One part has to do with management, the second has to do with fiscal policy and the third has to do with consumer sentiment.
The COVID-19 outbreak has been a battle the likes of which the world has not seen since the Great Depression and the Spanish flu pandemic that came a decade earlier. As with any battle, the first thing that the government needed to do was to make an assessment of its human and physical resource capabilities – the available number of doctors, nurses, hospitals, beds, ICUs (intensive care units), ventilators, respirators, test kits and PPE (personal protective equipment) sets. The next step that the government needed to take was to create a body that would conduct the war against the enemy in a unified and focused manner.
That body has been IATF (Inter-Agency Task Force on COVID-19). With DOH (Department of Health) and DILG (Department of the Interior and Local Government) as its co-lead agencies, IATF has performed commendably despite the initial inadequacy of resources. To date, IATF’s most important recommendations to President Rodrigo Duterte have been those relating to Metro Manila’s ECQ (Enhanced Community Quarantine) categorization and to the recent change in that categorization to GCQ (General Community Quarantine).
Thus, people already know that application of the basic principles of good management is key to the success of a campaign as the one being waged against the coronavirus.
People also know now that a robust, all-out fiscal response by the government is a decisive element of coping with a crisis such as the one that the nation is now facing. Filipinos belonging to the C, D and E income classes – Filipinos who have the least savings – are the people most badly hit by the COVID-19 crisis, and the vast majority of business enterprises are MSMEs (micro, small and medium-scale enterprises). At a time when jobs and livelihoods have suddenly disappeared, it is aggressive fiscal policymaking – outright grants under programs like SAP (Social Amelioration Program) as well as tax moratoria of all kinds – that ought to be at the center-stage. There is little point in talking about the debt-to-GDP ratio and bank lending rate reductions when millions of Filipino families don’t know where tomorrow’s meals will be coming from.
Economic theory says that people will be more active consumers when they are reasonably confident that their jobs will be there one year into the future. But a public-health concern has intruded into the picture, threatening to linger in the environment without vaccine protection, with the result that people become hesitant to consume goods and services that are not basic items. Thus, the third thing that has been taught by the public-private effort to defeat COVID-19 is that the consumer non-confidence shown by recent opinion surveys must be countered with measures intended to convince Filipinos that economic recovery is on the way and that they can confidently raise the level of their consumption. That, of course, will mean destroying the specter of a second wave of infections during the remainder of 2020 or the early part of 2021.