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Concepcion: Sustained economic activity can help Ph Economy brace for worst of Russia crisis, record debt

“We can’t stop the war in Europe, but we can help the country brace for crisis,” said Presidential Adviser for Entrepreneurship Joey Concepcion. The Go Negosyo founder believes that sustaining the current increase in local economic activity will help the Philippines weather the crisis brought about by the Russia-Ukraine conflict and the record rise in the country’s debt.

“It’s now become more urgent for the Philippines to maintain its Alert Level 1 status until the end of the year. And to do this, we have to continue to vaccinate, booster and keep our Covid indicators under control,” he said.

Concepcion explained that lockdowns and restrictions have been particularly harmful to the Philippine economy as it is highly dependent on mobility. “We are a consumer-led economy. We depend on mobility,” he said. “If our Covid numbers go up again, our mobility will be restricted and we would reverse the gains we’ve achieved so far,” he said.

He added that the country’s MSMEs are severely affected by restrictions, yet they generate more than half—63.2 percent according to the Department of Trade and Industry—of employment in the country.

“Giving enough cash flow to our entrepreneurs will cushion the effect, and they will have a better chance of surviving if the situation in the Ukraine becomes worse,” he said.

Concepcion further said that keeping businesses open will help contribute to revenue generation for the government and help pay back its debt, which as of January has reached a record Php12 trillion, or USD256 billion. Since the start of the pandemic in 2020, the Philippines’s debt has increased by almost Php4 trillion, with Covid-related borrowings reaching Php2.74 trillion in 2020 alone.

“We were able to hit 7.7 GDP growth in the fourth quarter, better than most had expected, when we reopened the economy,” he said. He also noted that before the Russia-Ukraine conflict, the consensus was that the Philippines would have 6 to 6.5 GDP growth in the first and second quarter of 2022. “We have addressed the public health situation, and now we have to keep on track with the economy,” he said.

The Russia-Ukraine crisis has disrupted global raw material flows, sending crude oil and wheat prices to multi-year highs. The Go Negosyo founder believes small businesses will be hit hardest by the rise in commodity prices that come as a reaction to the rising tensions in Europe. Basic commodities like wheat, milk, sugar, and oil have skyrocketed, sending shockwaves that will be felt most acutely by small businesses who are now only starting to recover from the pandemic’s restrictions on economic activity.

Concepcion’s push for a sustained reopening of the economy involves the resumption of face-to-face classes and the return of employees to their places of work. “Schools and offices have a massive multiplier effect in spurring economic activity, especially with MSMEs like cafeterias, retail shops and transport,” he said. He also called on fully vaccinated consumers to trust in the efficacy of vaccines and resume their normal economic activities.

He has also called for fully vaccinated Filipinos to get their Covid-19 booster shots to help maintain their immunity and keep healthcare utilization at low risk levels. Medical doctors have earlier cautioned against people lowering their guard and forgetting to practice minimum public health safety protocols, raising fears that infection levels might again rise.

Nevertheless, the Go Negosyo founder is confident that current indicators will hold. “I’m still very optimistic with 2022 because despite the odds, we were able to control infection levels,” he said. “What we have to do now is to be on Alert Level 1 for the rest of the year,” he said.

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