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All tools ready to combat crisis

Joshua Lao

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Despite lower gross domestic product (GDP) growth forecasts from international credit watchers and banks, the country has all the things it needed to face the dreaded coronavirus (COVID-19) impact.

This was learned from Department of Finance (DoF) Secretary Carlos Dominguez III as he noted that while the virus’ full extent impact remains uncertain, the Philippines is prepared to overcome its effects.

“Nobody really knows the effect of this virus. If the whole world will go down, we are not immune. But I tell you, I am really happy that the contagion is not very large on the Philippines. If at all, it will be because our trading partners are suffering,” Dominguez said.

“Internally, we have all the financial and monetary tools to defeat the effects of this virus. I wish we also have the vaccine for the virus but we don’t,” he added.

Nothing certain for now

Sought for comment regarding the possible revision of the 6.5 percent to 7.5 percent GDP target, the DoF chief said that such remains appropriate given the uncertainty on its full impact.

“We don’t know the total effect. In fact, I am reading the statement of the IMF (International Monetary Fund). They were saying that they don’t know. I don’t want to preempt what they’re saying because I don’t have an overview of the world, IMF has. If they don’t know, how should I know? But we’re ready here in the Philippines,” he said.

Earlier, international credit watcher S&P Global Ratings casted a lower GDP outlook for the Philippines at 6.1 percent, a tad lower than its previous 6.2 percent forecast.

Less pronounced effect

“People flows are less important (in the Philippines) than for many neighbors. Tourism-related exports are only 3 percent of GDP and less than a fifth of visitors are from China,” S&P said.

“More uncertain is the impact on supply chains. The Philippines is both upstream and downstream from China with processed intermediate trade with the country accounting for about 15 percent of overall trade,” it added.

Moody’s Investors Service, another credit watchdog, likewise lowered its outlook for the Philippines to a similar 6.1 percent, indicating that the government will fall short of its 6.5 to 7.5 percent GDP target.

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