Brace for tough times ahead

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Amid reports of destructive floods caused by recent typhoons and massive job losses brought about by the COVID-19 pandemic, Bangko Sentral ng Pilipinas Governor Benjamin Diokno said in an online press briefing that “preliminary data from July to September suggest that the worst is over.”

He cited as basis for his statement the country’s favorable balance of payments, higher foreign direct investments and increase in cash remittan­ces by overseas Filipino workers.

Following his line of thin­king, the country can look forward to the economy’s eventual recovery.

In effect, he debunked the assessment by some foreign and local financial analysts that the country’s economy is in for a hard ride in the next two or three years.

Diokno’s expression of optimism about the economy echoes earlier statements by the country’s economic managers and the Department of Trade and Industry.

In normal circumstances, the facts and figures Diokno cited to support his worst-is-over assessment should be a cause for joy in the country’s business circles.

Somehow, they indicate that foreign investors continue to have a favorable outlook on the Philippines and that there are sufficient foreign reserves to meet the country’s import requirements.

Using textbook economic standards, Diokno deserves a grade of “A” for his assessment. In financial lingo, it may be described as “marked to model.”

But whether or not it is realistic under the prevailing circumstances is a different story.

For owners of businesses that have closed shop and the millions of Filipinos who lost their jobs here and abroad due to the pandemic, the signs of economic recovery that Diokno mentioned is a big question mark.

Under the present situation when the government has yet to put in place a coherent business recovery program, they have scant reason to believe business would pick up or jobs would be available anytime soon.

For them, to use a street remark, it’s “dedma” (or who cares?). Those economic indicators would not make any significant difference in the condition they find themselves in at present and expect to be in the days to come.

Recall that in the past, when the government announced the gross national product (GNP) grew by, say, 6 or 7 percent, and the person on the street was asked about its effect on him or her, the usual response was either dedma or “wala” (nothing).

The so called trickle down effect of GNP growths was, if at all, hardly felt by the C, D and E sectors of our society. The benefits of such “economic prosperity” were enjoyed mainly by the upper strata or the country’s 1 percent.

It should not come as a surprise if the sectors adversely affected by the pandemic adopts a similar dismissive or nonchalant attitude toward Diokno’s worst-is-over statement.

There is no question that in times of crisis, or when things seem to be in bad shape, statements that encourage hope or positivism help lift up the spirit.

But caution should be taken that those statements do not unduly minimize the problem or raise false expectations, otherwise they may result in complacency, lack of initiative and other similar consequences.

It is doubtful if the worst is really over for our economy. Not by a long shot. Things could get bad before they get any better. The pandemic is not yet over.

Although a vaccine for COVID-19 is reported to have met clinical tests, they may not be available anytime soon because the Philippines has to join the queue of countries that want to avail of it, too.

While the economic indicators cited by Diokno look favorable, there is no assurance they will, at the shortest time possible, result in the reopening of shuttered businesses or return to work of displaced workers and, going one step further, the creation of new job opportunities for new entrants in the job market.

Let’s not sugarcoat the situation we are in at present. Tough times lie ahead. Instead of giving false hopes, the people should be advised to brace for them and adopt the measures needed to meet them head on. INQ

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