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Out of the frying pan and into the fire. This pretty much sums up the sentiment of the world as the Russia-Ukraine conflict sent commodity prices soaring.
Barely have we put the pandemic behind us, and now prices for basic commodities like wheat, sugar, milk and gasoline are going through the roof. The ripple of hyperinflation is not far behind, if not here already. That is why I think the downgrading of the NCR and 38 other cities and provinces in the Philippines came just in time and will help mitigate the impact of the crisis.
Reopening the economy is important to our MSMEs. Unlike medium and large companies, small enterprises have short credit lines and any minor disruption is felt acutely. One can just imagine what almost two years of lockdowns, restricted mobility, and limited capacity has done to them. As people return to work and schools reopen, our small entrepreneurs can expect more customers at their cafeterias, salons, and shops; buses, jeepneys, trikes and taxis will again have enough passengers to make a profit. Schools are especially important because a lot of small businesses depend on the economic activity they generate.
Helping our MSMEs through this new crisis matters because small businesses make up almost all – 99.51 percent, in fact – of the business enterprises in the country. The tax revenues they generate can do so much to help us pay back our loans, which now is at P11.73 trillion, or $229 billion. Nearly P2 trillion or $37 billion of that amount came from borrowings in 2021 alone, and most of it went to funding our battle against the pandemic.
With the opening of the economy, the government is expecting an additional P9.4 billion worth of economic activity per week, especially if we do well and continue to be on Alert Level 1 for the next three months. That’s some 170,000 Filipinos being able to make a living again.
Increasing economic activity is only one of the levers. There is also the option to raise taxes, but of course no one wants that. We pull the levers we can pull, and for now, the lever we choose is to increase economic activity so that we can generate enough income and contribute to the taxes that will enable us to service our debts and retain our good credit rating.
But there is only so much any government can do. It has already taken the first step by downgrading the NCR and several key cities and provinces to Alert Level 1 status; that is a good thing because it paves the way for the individuals to now step in and do their part.
During our last Go Negosyo townhall meeting on Feb. 24 with government officials, experts, and the private sector, it became clear that with the lowest alert level in place, the responsibility of keeping our country on the path to recovery now rests on the individual. It is up to ordinary citizens to keep themselves and others safe and protected so that we don’t experience another surge in cases that may force our economy to lock down again.
The road has been paved clear as best as it could be. The Philippines is today in a better spot compared to how its neighbors are now grappling with new waves of infection. The Philippines’s lower COVID indicators are the result of deliberate effort and cooperation between the private and public sector.
More than 60 million Filipinos have done their part by getting vaccinated. But we can do more to make our transition to the new normal as sure and steady as we can.
If you have been vaccinated, get a booster when the time is right so that we maintain our wall of immunity. Persuade those who are hesitant to go and get their shots, most especially the elderly and the vulnerable.
Beyond vaccinations and wearing face masks, there is one more thing we can do. Let’s take it a step further and resume our normal lives. We must trust that if we are vaccinated, we will be protected against severe disease and hospitalization. Go out and eat at your favorite restaurant, spoil yourself at the salon or spa, travel, shop or just go back to the office. Every little economic activity helps.
The profit margins of small businesses have been squeezed dry, and with the higher cost of commodities, we can only guess how difficult the coming weeks are going to be. Not everybody can adjust their prices to keep up with rising costs, and not everybody can afford to spend right now; but those of us who are able must do what we can. We must help ourselves.
The coming elections should renew our confidence, and with hope our new leaders will build on the successes of this administration. By and large, I would say that our pandemic response programs were effective, which makes it no surprise why the President’s ratings remain high.
We have laid down the right framework, and that is why we are here where we are right now and starting to live in the new normal. Maintaining our country’s health is important because the economic benefits of the downgrade to Alert Level 1 will take some time to work. It will take some patience and persistence, but I am convinced we are on the right path.
The bottom line is, we cannot be mere bystanders and expect a vibrant economy. We must be active participants in it. We must be its creators.