Ramping up infrastructure and food supply chain is critical to stimulate domestic consumption and get the economy back on track, the Department of Finance (DOF) said in a statement Tuesday.
“Build, Build, Build infrastructure modernization program is the best driver of economic growth, and, hence, should be restarted subject to compliance with minimum health standards, once the mobility restrictions are lifted and the coronavirus outbreak is contained,” said DOF Secretary Carlos Dominguez III.
To reinvigorate consumer spending, Dominguez said the government should promote the manufacture of products that have “strong and inelastic demand,” notably by businesses involved in food production and logistics.
Dominguez added the government should also support the whole value chain of food production, including the establishment of food markets for efficient distribution—similar to the fruit and vegetable markets established decades ago in Japan—where farmers can directly sell their produce to consumers.
“We have to stimulate demand, and that’s with ‘Build, Build, Build’ and push[ing] food production,” Dominguez said during the Monday night meeting of the Inter-Agency Task Force on the Management of Emerging Infectious Diseases (IATF) presided by President Duterte.
Dominguez pointed out that the infrastructure program “remains to be the best driver of economic growth because it has the best multiplier effects in terms of employment and shared prosperity.”
The department assures that government is finishing up an economic recovery program to help businesses get back to their operation.
“It would be useless to provide relief to businesses if demand remains weak and consumers lack the means to buy their goods and services,” Dominguez added.
Dominguez remained optimistic that the economy can get back on its positive growth trajectory, even though first-quarter growth contracted by 0.2%, because the Philippines was the first country in Southeast Asia to impose strict community quarantine measures, in step with President Duterte’s priority goal of saving lives and protecting communities.
Infrastructure and food supply chain are part of the department’s proposed five priority measures along with government support to the entire food value chain, mass hiring of contact tracers, and urgent passage of the Corporate Income Tax and Incentives Rationalization Act (CITIRA) to reopen the economy.