Economists urge cash aid for poor amid pandemic

Philippine economists urge the government to provide immediate cash assistance to the poorest Filipinos amid the novel coronavirus pandemic.

Experts recommend a program similar to Hong Kong's, where each adult resident receives around $1,200 (P61,200) in cash, alongside tax breaks and financial aid for companies.

Economists from the University of the Philippines School of Economics suggest increasing payments to poor households already identified in conditional cash transfer programs and identifying new beneficiaries urgently.

Finance Secretary Carlos Dominguez said that due to the pandemic, the government's budget deficit and spending will exceed the program this year. The government has announced an initial stimulus package amounting to PHP27.1 billion to address the impact of the virus.

The Philippine government can afford to launch fiscal packages considering the country's low debt-to-GDP ratio of 41.5 percent, while the Bangko Sentral ng Pilipinas (BSP) can further cut interest rates with the 'relatively high' borrowing rate currently at 3.25 percent.

Gregory Wyatt, PSA Philippines Consultancy, Inc. Director for Business Intelligence, commended the government's emergency subsidy of up to PHP8,000 for 18 million low-income households for up to two months, saying this is higher than the recommendation by some economists of providing PHP2,000 per family per month.

The special law signed by President Rodrigo Duterte on Tuesday enables the government to aggressively address the Covid-19 crisis with emergency subsidies and other fiscal measures.