Road to New Normal Will be Slow But Sure
There is no quick fix to our battered economy as we reopen it. The road to the new normal and economic recovery will be long and slow but sure, as it is with the rest of the world.
We can already see how the economy would fare in the second quarter of 2020. And we don’t have to wait for the official data on the gross domestic product to validate this observation. But we should be optimistic and focus on recovery in the new normal of doing business.
I am sure conglomerates as well as the small and medium-scale industries will adapt to the changing business environment forced upon them by Covid-19. For starters, they will impose rigid screening on employees and strict health protocols to keep the virus at bay.
Most companies will likely revisit and refocus their operations given the new normal that will prevail in the reopening of the economy. Vista Land & Lifescapes Inc., part of the Villar Group of Companies that I head, for instance, will refocus on optimizing its current portfolio of investment properties. It will take advantage of its geographic reach in 147 cities and municipalities across the country and aims to generate over 50 percent of the company’s revenue outside Metro Manila. Vista Land will also focus on developing integrated urban projects combining lifestyle retail, prime office space, university town, health care, themed residential developments, and leisure components.
The real-estate sector is partly dependent on remittances from our overseas Filipino workers. Luckily, our end-users, as Vista Land President and Chief Executive Manuel Paolo Villar observed, remain committed to completing payments even as demand for affordable housing persisted.
The remittances that fuel housing and the general economy are not about to falter despite the lower amount of money sent by our workers abroad. Bangko Sentral ng Pilipinas Governor Benjamin Diokno has expressed optimism that remittances will recover from the adverse impact of the Covid-19 pandemic.
The BSP’s concern on how the Covid-19 pandemic will impact on future remittances flows is understandable given their strong contribution to consumption expenditure. The Bangko Sentral just trimmed its growth forecast for remittances this year to 2 percent, slower than its previous forecast of 3 percent, taking into account the impact of the pandemic on the employment of overseas Filipino workers.
“However, it is important to point out that crisis or no crisis, Filipinos abroad continue to send remittances to their families at home. It would appear that OFW remittances have an altruistic character. Furthermore, the adverse impact of Covid-19 on remittances may be temporary,” said Diokno.
Restaurants and the fast-food industry, meanwhile, are two of the sectors that will experience challenging times during the pandemic period. Jollibee Foods Corp., the biggest fast-food chain, just recently announced it would spend P7 billion to reorganize its global business structure in response to the changing consumer behavior. It is being forced to create revenue growth drivers for the future, especially food delivery-to-home and offices, and take-out and drive-thru.
Jollibee knew that consumers around the world would not quickly revert to their pre-Covid-19 behavior even if lockdowns and other forms of restrictions were lifted in different nations.
The transportation system is another sector that will see a radical change during the reopening of the economy. We may see some changes painful to the transportation operators and the commuting public in general. But we have to try our best to adapt to the new transportation regime if we want the economy to rebound and restore jobs.
The government, among others, has proposed the consolidation of operators and rationalization of routes, dedicated lanes for public transportation, and online transactions and payments. The government is allowing buses to operate at 50 percent capacity in areas under general community quarantine.
I am pleased to learn that the administration of President Duterte is thinking of ways to alleviate the plight of workers and businesses that are reeling from the pandemic. I am supporting the initiative of the Department of Trade and Industry on the proposed Philippine Economic Stimulus Act of 2020 to provide immediate assistance to workers and businesses and help the economy recover from the impact of the coronavirus pandemic.
“As we work toward the gradual lifting of the quarantine, more businesses will be able to operate, but at lower capacities due to limited capital resources that dwindled during the quarantine period. There are also strict health measures that are being imposed and the firms would need working capital loans,” said Secretary Ramon Lopez. “At a very critical time such as this, we must not only ensure a safe working environment for our citizens, but also continue to find means to support, and more importantly save the jobs of those adversely affected to facilitate faster economic recovery.”
The PESA bill proposes a P1.3-trillion post-pandemic stimulus package, which includes a budget of P650 billion for an expanded infrastructure program on health care, education, and food security.
The business sector and the labor force need all the help they can get. The road to recovery is not easy, as we like to believe. But we as a nation can make it happen.