October 14th, 2021
House Ways and Means Chair and Economic Stimulus and Recovery Cluster Co-Chair (Albay, 2nd district) says that the target GDP growth rate for this year of 5%, but aggressive catch up efforts in lagging regions will have to be undertaken, through more vaccine deliveries.
“It’s possible. But I disagree that only reopenings in key regions like NCR will be the necessary step. We need more vaccinations in lagging regions like BARMM and Bicol. In Bicol, we are just still at 10% vaccination rate,” Salceda said.
Salceda made the remarks in response to statements from the government’s economic managers this week that the growth target is still attainable.
“The challenge really is two-pronged. One is demand, and the other is inflation. Both can be solved by vaccinations in areas where supply and demand bottlenecks exists, like Bicol. The differences in COVID-19 situation among regions is what’s causing transport bottlenecks. So, you make the situation similar through vaccine equity,” Salceda explained.
“We are at a bit of a cliff here when it comes to inflation. You stimulate demand in NCR without fixing the interregional supply issues through vaccine equity, and you will see high inflation, especially in transport and food. So, while you might see high nominal growth, your real growth is in trouble. You have to do both demand stimulus and vaccine equity. There is no way around it,” Salceda added.
“The simple fact of the matter is that we get our food from the provinces. If they’re still not out of the woods with COVID-19, you are going to have problems, no matter how high the vaccination rate is in NCR,” Salceda explained.
“My suggestion to the economic managers, given my own experience with helping solve economic crises of 1997, 2004, and 2008 is this: keep the policy rates pro-growth, increase food supply and food mobility so we can efficiently allocate, and vaccinate in the regions, which are aching for new arrivals,” Salceda said.
“Manila is on the road to being okay. The regions are still not. We can’t do this without aggressive catchup efforts on the part of the national government, especially on vaccine arrivals.”
Asked about his inflation projections for 2022, Salceda says it is still possible to stay at 4% or below, but he thinks “that depends on whether we see the usual super typhoon in October and November, and whether fuel costs in the world market continue to increase. Both are outside our control. But vaccine equity and food mobility is within our control.”
“I would strongly suggest that we focus on those things,” Salceda said. #