THE key to surviving economic shocks, the National Economic and Development Authority (Neda) said, is to make good business decisions.
In a televised interview a few hours before the President delivered his first State of the Nation Address (SONA), Socioeconomic Planning Secretary Arsenio M. Balisacan said those bound to suffer difficulties during periods of shock are those who made poor decisions.
Balisacan, however, expressed confidence that the Philippines is far from experiencing difficulties such as “systemic defaults,” which is one of the concerns that international organizations cited as a risk due to the slow recovery from the pandemic, rising commodity prices due in part to the war in Eastern Europe, among others.
“Siguro naman yung talagang mahihirapan ay ’yung mga, to begin with, hindi magandang decision sa pagpasok sa business pero kung napag-aralang mabuti, usually ’yung mga ganitong klaseng shocks hindi dapat basta’t bumagsak na lang ’yung negosyo,” Balisacan said.[I guess the ones who will reel from the shocks are those that didn’t study much the business they entered; usually, with shocks like those, a business need not collapse just like that].
“In my view, we are far from that possibility [debt default] where we will have systemic defaults. We can see that from the economy, which is robust,” he said, partly in Filipino.
He said among the programs that will help the economy better survive the challenging times is the continuation of the Build, Build, Build (BBB) program of the Duterte administration with the help of the private sector.
Balisacan said part of the BBB strategy is to reach out to the private sector through Public Private Partnerships (PPP). Neda, the parent agency of the PPP Center, will help ensure that these projects are “attractive” to the private sector.
“Part of our strategy is to reach out to the business community so they can help, and with their investment we can grow the economy; and our PPP can be strengthened in order to enhance the role of the private sector in development efforts,” Balisacan said.
The President, in his first SONA, stressed that the national government will continue and expand Duterte’s infrastructure program.
Marcos Jr. said his administration will “keep the momentum” of infrastructure projects by not suspending any of the ongoing projects. Nonetheless, he said, they will study existing proposals.
By expanding the infrastructure program, the President said, the government will turn to PPPs which “hold great potential” in expanding infrastructure initiatives and even innovation efforts.
The President said his priority bills include the amendment of the Build Operate Transfer Law to strengthen the PPP efforts. The amendments to the law will help address “ambiguities” in undertaking PPPs as well as help create an enabling environment for these projects.
Apart from the usual infrastructure projects, PPPs will be tapped for energy projects, specifically for small-scale nuclear projects that will help the country attain energy security, Marcos said.
Earlier, World Bank Global Director of Macroeconomics, Trade & Investment Marcello Estevão said poor and even middle-income countries are at risk of facing a debt and food crisis given the steep increase in commodity prices.
Estevão said the war in Eastern Europe has already sent food prices through the roof and this poses a serious concern for many poor countries, including a number of middle-income countries.
This is a major concern given that one crisis alone could have a significant impact on millions. In 2008, Estevão said, the food crisis caused malnutrition to increase.
Many poor families were forced to sell their valuables in order to buy food. Some of them even sacrificed the education of their children just to cope with high food costs. Due to the pandemic, many countries are already seeing public debts surge.
By the end of 2020, Estevão said, public and publicly guaranteed debt owed by poor countries to foreign creditors stood at a record $123.8 billion, an increase of nearly 75 percent from 2010.
JULY 25, 2022