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Economy shrinking fast alarms Cebu business leader

BUSINESSMAN Rey E. Calooy said the government is alarmed that the Philippine economy shrank fast shortly after the start of the Covid-19 pandemic in 2020 compared to other countries.

Calooy, Filipino-Cebuano (FilCeb) Business Club president, had urged the government to reduce the restrictions on the people’s movement to save the economy by allowing them to go shopping for Christmas and New Year in December, a determining month of the year.

“We are a consumption-driven economy. We are not in manufacturing nor investment economy. It will be a big factor for the economy to rebound if the people will buy and money starts circulating again,” Calooy said.

However, Calooy said this did not happen because while malls and other business firms closed at 10:00 pm plus midnight sales before the Covid-19 pandemic, they are now closing at 7:00 pm due to lack of sales.

“The people did not anymore buy maybe because they have no more money as millions lost jobs and livelihood or they keep their savings because they are facing uncertainty,” Calooy said.

The problem is compounded by the fact that 65 percent of Gross Domestic Product (GDP) is in Metro Manila.

“If this is a piece of bread, more than half is in Metro Manila and the 35 percent is shared with the rest of the country, including Cebu. The economy is concentrated in one place and is not dispersed to the countryside,” Calooy said.

Metro Manila, Makati City and Quezon City are big economies. Makati City alone has more than 400 banks where regional, national and international offices of multi-national companies are transacting business there.

Makati can stand alone without Internal Revenue Allotment (IRA) which is just one percent of its income from businesses. The Makati LGU is giving free hospitalization, free college education, among others to its constituents because it has enough funds for it, Calooy said.

“This is why the business sector is important in growing the economy of a nation,” Calooy said.

He said the economic data showed point two (-.2) negative Gross Domestic Product for 2020’s; 6.5 percent negative GDP for the 2nd quarter; and 11.5 percent negative GDP for the 3rd quarter.

Calooy said that by the second week of February, we will already know the GDP for the entire 2020. ELIAS O. BAQUERO