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Presidential Adviser for Entrepreneurship Joey Concepcion said the IATF’s decision to downgrade the National Capital Region (NCR) and 38 other areas to Alert Level 1 starting March came just in time.
“It’s a critical juncture for our economy. We are just coming out of the worst of the pandemic and straight into rising commodity prices worldwide. To have remained closed would have created a perfect storm for our MSMEs,” he said.
Concepcion further added that encouraging indicators on the country’s hospital utilization rates, positivity rates, and the number of new infections should help in encouraging more confidence in people as they return to normal activities.
The Go Negosyo founder said the Philippine economy cannot afford to remain closed as the consequences of the war between Russia and the Ukraine are certain to reach local shores. “We have to have a strong economy if we are to weather this oncoming storm,” he said.
Concepcion said the resilience of MSMEs in particular will be critical in keeping the Philippine economy strong. The war in the Ukraine has driven up commodity prices worldwide and is expected to have an immediate effect as the local economy opens. Commodities like wheat, milk, sugar, vegetable oil, plastic resin, paper and gasoline have seen increases of over 100 per cent since the beginning of the conflict, sending shockwaves in markets across the world.
“We’re moving from a pandemic and into a storm of rising commodity prices,” Concepcion said, “and this will surely affect our MSMEs as they already have difficulty recapitalizing their businesses.”
He said reopening the economy has now become even more urgent as the country has entered a critical level in its debt-to-GDP ratio, which now stands at 60.5 percent. The Philippines has Php11.73 trillion in domestic and external obligations, as it incurred an additional Php1.93 trillion, or US$37billion in 2021.
“Our ability to pay back our loans hinges on increased economic activity, which is dependent on more mobility,” he said.
“With more establishments being allowed to operate at full capacity and now intrazonal and interzonal travel, this will greatly aid mobility. With greater mobility will come more economic activity.”