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Having a government with a strong fiscal position and having a healthy financial system will drive the Philippines' economic recovery post-pandemic, Finance Secretary Carlos Dominguez III said on Friday.
In his speech at The Manila Times virtual economic forum, Dominguez said the current government highly regards the preservation of long-term financial viability, which have benefited the country as shown by the series of positive ratings action even during the pandemic and, in turn, allowed it to tap borrowings at lower cost and favorable terms.
“Through the darkest times of the pandemic last year, we were never under the illusion that this challenge will be short. We are prepared to fight a long battle, exercising prudence over the use of our fiscal resources,” he said.
“The worst we could do is to run out of water before the fire is out,” he added.
Citing as an example the need to provide coronavirus disease (Covid-19) vaccines even if it takes years just to eliminate the virus and its risks, Dominguez said the government will need to have enough resources to do this.
“A sustainable fiscal position and a strong financial system are the platforms on which we launch our economic recovery,” he said.
Because of the pandemic, the domestic economy contracted by -9.5 percent in 2020.
This year, economic managers expect the economy to recover and expand between a range of 6.5-7.5 percent.
Dominguez admitted that “we cannot recover all that we lost in 2020 in one blow.”
“It will take us more years to nurse our economy to where it was before the pandemic struck. However, the prospects for 2021 are encouraging,” he said, noting that the government expects the arrival of Covid-19 vaccines this year and health protocols are in place.
The Finance chief also indicated his optimism that government financing will be met by the improved collections by both the Bureau of Internal Revenue and the Bureau of Customs with the help of their respective digitalization programs, and the healthy domestic liquidity situation.
“We also have available policy tools to sustain a low-interest rate environment,” he added. (PNA)