Diokno: Addressing pandemic scarring 'most difficult' among economic goals

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Metro Manila (CNN Philippines, August 8) – Addressing the long-term impact of COVID-19 is the administration's most challenging task, Finance Sec. Benjamin Diokno said.

The health crisis that forced the government to impose lockdowns severely affected productivity and human development, which are key to the country recovering from the pandemic and achieving a level of growth.

"The most difficult would maybe be the scarring effect of the pandemic. So we have to maybe focus on education and health to make sure that our young, which is our asset, do not suffer so much in terms of their long-term income," Diokno told CNN Philippines' Pinky Webb in an interview which aired Monday.

The Finance chief, however, was confident on prospects in the near-term.

"What is achievable is for example, the desire to reduce our debt-to-GDP ratio from its current level to maybe around 61% or 60% next year. Most of our targets are ambitious, but they are definitely achievable," said Diokno.

The country's debt-to-GDP (gross domestic product) ratio ballooned to 63.5% by the end of the first quarter of 2022. The administration targeted to bring this below 60% by 2025.

Economic managers also aim to achieve upper middle-income status and reduce the poverty incidence to a single-digit rate by end of the Marcos administration in 2028.

Economists and organizations like the ASEAN+3 Macroeconomic Research Office (AMRO) sounded the alarm on pandemic-induced scarring, especially on human capital as tight restrictions forced companies to lay off workers, while children struggled at hybrid learning due to lack of resources and poor connectivity especially in remote areas.

AMRO said the Philippines economy must post robust growth this year and the next to significantly make a dent on recovering from the pandemic.

Growth is expected to average 6.5-7.5% this year and 6.5-8% annually from 2023 to 2028, based on the medium-term fiscal framework of the Marcos economic team.