AS a country, a lot of things do not go our way these days. The economy is in a recession or is in a severe downturn compared to previous years.
“A pessimist sees the difficulty in every opportunity; an optimist sees the opportunity in every difficulty." ―Winston Churchill.
The health situation is getting worse by the day, even with the start of vaccinations.
Widespread lockdowns are coming back, although now confined to small clusters of households. The government is in the red, as shown by the substantial budgetary deficit.
Schools remain closed. Unemployment is high. There are grave problems left and right. The news items mentioned below show these trends.
As tax collections continued to drop, the national government budget was in a deficit. The fiscal gap stood at a P14 billion in January, reversing the P23 billion surplus in January 2020.
The government experiences a deficit when it spends more than the revenue it generates. As expected, tax collections declined as economic activities slowed down due to the pandemic.
Now hear this. Despite this slowdown in tax collection, a proposed law could further balloon the deficit - the Corporate Recovery and Tax Incentives for Enterprises Act (CREATE), which is now awaiting President Rodrigo R. Duterte’s signature.
This law will provide around P1 trillion worth of tax relief over the next decade.
That is a trillion pesos less in tax revenues over ten years or P100 billion a year.
“CREATE is the largest fiscal stimulus program for enterprises in the country’s history,” Finance Secretary Carlos G. Dominguez III said in his presentation at the Southeast Asia Development Symposium of the Asian Development Bank.
Congress passed CREATE in February, but President Duterte has yet to sign it. The priority measure will lapse into law on March 27.
In the view of this column, the hesitation to sign it is related to the large deficit. In light of the pandemic's severity, the law could further drag the economy, contrary to what its proponents argue.
If there should be a substantial deficit, it should be due to increased expenditures that directly benefit the poor in this time of high unemployment, not wealthy corporate owners.
The prognosis on the state of our economy in the coming months is still bleak.
The Philippines' failure to contain the coronavirus despite a year-long lockdown, worsened by its slow vaccination rollout, will continue to weigh down the country's path to recovery and normalcy, Moody's Analytics said.
In its weekly brief, Capital Economics downgraded its gross domestic product outlook for the Philippines to 9.5 percent from its previous estimate of 11 percent.
Last year, the economy contracted by a record 9.5 percent.
On the health side, the situation is not encouraging either.
If “variants of concern” become dominant, an official of the Department of Health (DOH) warned that cases would increase by "28 times" instead of just three times after a month.
Dr. Alethea de Guzman, OIC Director III of the DOH Epidemiology Bureau, said that the aim of DOH is not to reach that situation—for if that happens, the health system will be "overwhelmed."
University of the Philippines Prof. Guido David of the OCTA Research Team warned that the Covid-19 cases in Metro Manila would increase to 16,000 daily on April 16, 2021, if the government cannot mitigate the virus's spread.
This situation points to an emerging problem. The tightening of restrictions will again significantly affect the country’s move toward economic recovery.
According to the London-based think tank -Capital Economics, recent economic data have been disappointing. It noted that export growth fell back further into negative territory in January. Labor market data also show that the unemployment rate remained at 8.7 percent at the start of 2021.
Employment in the country also continues to be problematic, with four million Filipinos remaining jobless in January, reflecting the relatively slow economic recovery pace.
We can quickly become pessimistic by the turn of events described above. But that should not be the course of action we should take.
Pessimism will not help us solve our problems. Sure, we are on a bumpy road while inching forward in the drive to recovering many of the conditions we were in before.
How about listening to this to reduce the bumps and move faster:
“Do not anticipate trouble, or worry about what may never happen. Keep in the sunlight.” - Benjamin Franklin.