DOF REPORT ON COVID-19 SOCIO- ECONOMIC RESPONSE As of April 21, - - PowerPoint PPT Presentation

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DOF REPORT ON COVID-19 SOCIO- ECONOMIC RESPONSE As of April 21, - - PowerPoint PPT Presentation

Aug 29, 2022 323 likes •471 views

DOF REPORT ON COVID-19 SOCIO- ECONOMIC RESPONSE As of April 21, 2020 Out Outline ne of of t the P Presentation on I. Overview of the Philippine Economy II. Economic Impact of COVID-19 III. Four-Pillar Socio-Economic Strategy Against

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DOF REPORT ON COVID-19 SOCIO- ECONOMIC RESPONSE

As of April 21, 2020

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DEPARTMENT OF FINANCE 2

Out Outline ne of

  • f t

the P Presentation

  • n
  • I. Overview of the Philippine Economy
  • II. Economic Impact of COVID-19
  • III. Four-Pillar Socio-Economic Strategy Against COVID-19

a. Emergency support for vulnerable groups b. Marshalling resources to fight COVID-19 c. Fiscal and monetary actions to finance emergency initiatives and keep the economy afloat d. An economic recovery plan to create jobs and sustain growth

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I.

  • I. OVERV

RVIE IEW OF OF TH THE PHILIPPINE NE ECONOM ONOMY

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DEPARTMENT OF FINANCE 4

The Philippines’ ’ macroeconomic fundamentals are strong

5.9% GDP growth in 2019; Average GDP growth from 2016-2019 is 6.4% Revenue effort of 16.9% in 2019 is the highest rate in 22 years

7.63 3.66 6.68 7.06 6.15 6.07 6.88 6.68 6.24 5.9 1 2 3 4 5 6 7 8 9 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 GDP Growth Rate Year

15.7 14.714.414.5 13.513.813.714.0 15.6 16.5 15.6 14.013.414.014.514.915.1 15.815.215.6 16.416.9

0.0 2.0 4.0 6.0 8.0 10.0 12.0 14.0 16.0 18.0 Revenue as % of GDP

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DEPARTMENT OF FINANCE 5

The Philippines’ ’ macroeconomic fundamentals are strong

Manageable Debt-to-GDP ratio

  • f 41.5% in 2019

March 2020 inflation rate is 2.5%, well within the target of 2% to 4%

5.2 2.5 2.9 2.6 2.5 1 2 3 4 5 6 2018 2019 Jan 2020 Feb 2020 Mar 2020 Inflation Rate Period Debt-to-GDP Ratio

74.5 68.5 61.4 53.9 54.7 54.8 52.4 51.0 51.5 49.2 45.4 44.7 42.1 42.1 41.8 41.5 10 20 30 40 50 60 70 80 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

Year

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II.

  • II. ECO

CONO NOMIC MIC IMP IMPACT CT OF CO COVID ID-19 19

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DEPARTMENT OF FINANCE 7

Recent Estimates of Economic Impact of COVID-19*

*Impact of COVID-19 on key economic sectors such as travel, tourism, exports, remittances, consumption, combined with the Enhanced Community Quarantine assuming that the pandemic will last until the middle of the year. Based on the DBCC Ad Referendum Approval of the Revised Macroeconomic Assumptions and Fiscal Targets in line with the Impact of the COVID-19 Pandemic dated March 26.

2020 GDP Growth

  • 0.8% to 0.0%

Temporary Unemployment 1.2 Million Workers Budget Deficit 5.3% Debt-to-GDP 46.7%

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III.

  • III. FOU

FOUR-PI PILLAR AR S SOCIO-EC ECONOMIC STRAT ATEG EGY AG AGAI AINST CO COVID VID-19 19

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Fo Four ur-Pi Pillar r Soci cio-Ec Econ

  • nom
  • mic S

Strategy A y Against C COVID-19 19

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Pi Pillar 1: Emergency cy support for vulnerable gr groups and in individ ividuals als (initial estimate of USD 11.6 billion)

It Item In In PHP millions In In US USD millions % % of GDP

  • Emergency subsidy program for 18 million low-income families

205,000.0 4,033.1 1.1

  • Wage subsidy program for employees of small businesses to incentivize retention of workers

51,000.0 1,003.4 0.3

  • Credit guarantee for affected small business to access bank financing during the crisis

situation 120,000.00 2,360.9 0.6

  • Net operating loss carryover (NOLCO) of five years to help business cope with losses

139,596.10 2,746.4 0.7

  • Department of Trade and Industry (DTI) loan program for MSMEs for enterprise development

training and livelihood kits 1,203.00 23.7 0.0

  • Department of Agriculture (DA) loan assistance for marginalized farmers and fishers, and

micro and small enterprises engaged in agriculture and fisheries production 2,500.00 49.2 0.0

  • Additional local government units (LGU) assistance to support vulnerable sectors

36,000.0 708.3 0.2

  • DA and DTI rice programs to increase productivity and boost buffer stock

16,500.0 324.6 0.1

  • LANDBANK loan program for LGUs to increase their emergency funding

10,000.0 196.7 0.1

  • Department of Labor and Employment (DOLE) cash assistance program to support OFWs

1,500.0 29.5 0.0

  • DOLE cash assistance program to support displaced workers

2,000.0 39.3 0.0

  • Social Security System (SSS) assistance to cover unemployment benefits

1,200.0 23.6 0.0

  • Technical Education and Skills Development Authority (TESDA) free online courses to upskill

workers 3,000.0 59.0 0.0

  • Tax expenditure for tax payment extension

470.0 9.2 0.0 SUB TOTAL 589,969.1 11,606.9 3.1

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Pi Pillar 2: 2: Exp xpanded medical resources to fight COVI VID-19 19 an and ensure the safe afety of f fr frontlin liners (USD 1.2 billion)

*Preliminary DOF staff estimates

Item In PHP millions In USD millions % of GDP

  • Philippine Amusement and Gaming Corporation (PAGCOR) and Philippine Charity

Sweepstakes Office (PCSO) assistance for purchase of medical equipment and supplies 2,900.0 57.1 0.0

  • Asian Development Bank (ADB) grant to support health measures against COVID-19

150.0 3.0 0.0

  • World Bank quick disbursing loan mechanism under the Fast Track COVID-19 Facility for

purchase of medical supplies and testing kits 5,000.0 98.4 0.0

  • PhilHealth subsidy on medical expenses coverage for all COVID-19 patients and healthcare

workers, in case of exposure to COVID-19 or any work-related injury or disease during the emergency.* 22,185.6 436.5 0.1

  • PCSO funding for COVID-19 medical coverage

420.6 8.3 0.0

  • Procurement of personal protective equipment (PPE) by the Department of Health (DOH) and
  • ther government agencies*

10,933.7 215.1 0.1

  • Test kit procurement and production*

1,102.8 21.7 0.0

  • Other medical supplies (e.g., Intensive Care Unit and isolation beds, and ventilators)*

11,962.5 235.3 0.1

  • Special risk allowance for healthcare workers*

200.9 4.0 0.0

  • Compensation to additional healthcare workers*

449.7 8.8 0.0

  • Compensation to all healthcare workers in case of severe infection or death from COVID-19*

33.7 0.7 0.0

  • Revenue forgone to expedite clearance and exempt importations of PPE and medical goods

from taxes and duties* 2,701.5 53.1 0.0

  • Compensation for private facilities used for the purpose of fighting COVID-19*

511.8 10.1 0.0 SUB TOTAL 58,552.8 1,152.0 0.3

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Pi Pillar 3: 3: F Fisc scal a and m nd mone netary a actions t ns to f fina nanc nce e emergenc ncy i ini nitiatives s an and ke keep the economy my afloat (USD 16.6 billion)

Ite Item In In PHP millions In In USD millions % % of f GDP

  • Additional financing from Asian Development Bank (ADB), World Bank, and

various multilateral and bilateral sources 310,000.0 6,098.9 1.7

  • Bangko Sentral ng Pilipinas (BSP) purchase of government bonds to fund

COVID-19 response measures 300,000.0 5,902.1 1.6

  • BSP estimated liquidity infusion into the economy as a result of the reserve

requirement ratio 200,000.0 3,934.8 1.1

  • BSP estimated liquidity infusion as a result of the cumulative reduction of 125

bps in the policy rate 33,000.0 649.2 0.2 SUB TOTAL 843,000.0 16,585.0 4.6 GRAND TOTAL 1,491,521.9 29,343.9 8.0

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Pi Pillar 4: An An eco conomic c reco covery plan to cr create jobs and sustain growth

  • Creation of an interagency task force to design a bounce-back plan

for post quarantine scenario.

  • Conduct of a nationwide survey (with +44,000 respondents) to assess

damage to industries, especially micro, small, and medium enterprises (MSMEs). Results used in crafting a bounce-back program with differentiated interventions for various groups (MSMEs vs. large businesses; manufacturing; hospitality; etc.).

  • Continued investment in social and infrastructure programs to help

revive and sustain economic growth.

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Thank you.