No revision of economic targets despite Taal eruption, ASF, virus

by Mary Grace Padin (The Philippine Star), 15 Feb 2020

MANILA, Philippines — The government will not revise its economic growth target for this year despite the risks posed by the Taal Volcano eruption, the Africal swine fever and the coronavirus disease (COVID-19), according to the Department of Finance (DOF).

Finance Secretary Carlos Dominguez said while these challenges may dampen growth, their impact would not be significant enough to revise this year’s economic growth target.

Dominguez said the reduction in growth would be cushioned by robust government spending on infrastructure and social services, coupled by a benign inflation environment.

“While these developments may dampen our growth, these threats are not enough to force a dramatic reduction in our growth estimates. The 2020 budget has been passed on time. A special law allows us to use the unexpended project funds from 2019,” Dominguez said.

“Greater public spending in infrastructure and social services, supported by an expansionary monetary policy and a benign inflation rate, should allow us to dramatically increase our pace of growth this year,” he said.

He said the government was on top of the situation and had acted decisively to address the threats posed by these three developments.

The finance chief said the Department of Agriculture (DA) had enforced biosecurity measures and set up more quarantine checkpoints to contain the spread of the ASF. Concerned government agencies had also rolled out intensified anti-smuggling and meat inspection efforts.

Meanwhile, Dominguez said key agencies and local government units were fast tracking the release of production, livelihood and financial assistance to farmers and fishers affected by the Taal Volcano eruption last month. He said the government would also implement recovery and rehabilitation for the affected areas.

“The new coronavirus or COVID-19, on the other hand, might very well be at an early stage of its global outbreak. However, the government responded to this public concern decisively and continues to implement proactive measures to keep our people safe. We are consoled by the observation that the virus has no local transmissions here,” he said.

The finance chief reiterated that the virus outbreak would most likely have an impact on the tourism sector, given the travel bans imposed by national governments and voluntary decisions of airlines to cut flights to and from China.

He said trade with China would also be affected due to the temporary closure of factories in Chinese cities, which have been under lockdown due to the virus.