The procurement of COVID-19 vaccines and the gradual easing up of the economy will enable the country to immediately recover up to 5 to 6% of the unemployment rate under the proposed Bayanihan 3 Act from the 10.4% posted in the second quarter due to quarantine lockdowns.
Albay Rep. Joey Sarte Salceda, chairman of the House Ways and Means committee, said about 4.5 million Filipinos have lost their jobs in 2020, translating to a 10.4% unemployment rate – the highest in 15 years.
The figure had already slid down to 8.5 percent in October, however, with the gradual easing up of quarantine restrictions that allowed workers to return to their jobs.
“I take it as a signal that as soon as we get the vaccine and return to the previous normal, we will recover to around 5% to 6% unemployment,” said Salceda, the principal author of the P302-billion Bayanihan to Rebuild as One Act or Bayanihan 3 which provides some P75 billion for the purchase of vaccines and other health requirements.
Salceda said Bayanihan 3, packed with emergency response and economic recovery programs, will serve as a “booster shot” to power the country toward overall recovery.
The measure is seen to bring an additional 1.5% of GDP in incremental deficit.
While the first two Bayanihan laws were able to keep the economy afloat, Bayanihan 3 is “the necessary booster shot so we can truly begin recuperating in 2021,” he said.
“Buy the vaccine now, not later. The bill places paramount emphasis on the procurement of vaccines,” said Salceda, who co-chairs the House Economic Stimulus and Recovery Cluster.
Its proposed interventions, he added, are primarily to ensure that national and local government units can mobilize “robust response and recovery programs,” following the two recent typhoons and the slower than expected economic recovery in the third quarter of the year.
“I made it clear to the economic managers that if we recover more quickly than expected in the 3rd quarter, a third Bayanihan may no longer be necessary. Seeing that the economy did not recover as quickly in the past quarter, and given the recent spate of typhoons, we need to provide emergency aid,” he said.
“Mass vaccination is actually the most critical determinant of recovery. There are two basic scenarios—a vaccine by end of 2021 or end 2023. Both pathways start with minimum health standards. The long road means higher fixed costs and lower economies of scale due to social-distancing imperatives. A quick vaccine will work like magic,” he said.
The government has set a P3 trillion borrowing program for 2020 and another P3 trillion for next year.
Given the country’s pre-COVID fiscal, monetary and external balances, Salceda said it is the agility and strength of the stimulus response and structural reforms that would shape the complexion and direction of Philippine post-COVID socioeconomic prospects.
“Maladaptation is a clear and present danger to excess fiscal risks which could curtail long-term output potential,” he said.
Salceda added the third stimulus program is necessary to ensure the crisis does not “eat up too much of our economic structure,” stressing that “it is very hard to recover when so many businesses have already closed for good.”
“The Executive can make their concerns known, and we will consider them. They can even give us a fiscal limit to work on, but what we cannot accept is the idea that we have spent enough in 2020. That may have been barely true if the recent calamities did not strike. The sheer fact is that more people have gone into poverty this year than we expected,” Salceda said.
The lawmaker said the House Ways and Means Committee already passed measures with P691 billion in 5-year revenue potential that is “more than enough to keep our credit ratings attractive.”
