ERWIN P. NICAVERA
May 13, 2020
A LOCAL business group said for the government to recover the economy amid the coronavirus disease (Covid-19) pandemic, it should go for nonelastic or essential demand.
Frank Carbon, chief executive officer of Metro Bacolod Chamber of Commerce and Industry (MBCCI), said the government has to help agriculture sector because the demand is there.
Carbon said this sector produces food as the most essential need of the public during this time of global health crisis.
“This means that even if the government pours in funds in agriculture sector, it can immediately convert it to revenues of farmers,” he said, adding that “so there will be money circulation as the demand exists.”
The MBCCI earlier said that three major industries in Negros Occidental is seen to incur about P14.7 billion in opportunity losses within the first six months of the year due to the pandemic.
Opportunity losses is the value that is supposed to be generated or realized under normal circumstance.
It projected that the agriculture sector including fishery and forestry will incur the lowest amount of opportunity losses, at almost P1 billion.
The figure is 10 percent of the P19 billion share of Negros Occidental to the sector’s contribution to the region’s GDP worth P60 billion.
The province’s agriculture sector will not be hit “very badly” as activities under which like rice and sugar production continues, it added.
Carbon explained that though quarantine measures are slowly easing, people still have fear brought by the virus.
The tendency, Carbon said, is that the public will spend first for the “essentials” mainly food rather than going to the parlor and other leisure establishments.
With uncertainties on employment as not all establishments are now back to normal operations, the spending of the people is directed on the “essentials” until such time their regular income is back, he said.
“Given a weaker purchasing power and shrinking market, needs are prioritized over wants,” the business leader added.
The MBCCI projection showed that the industry sector which includes mining, quarrying, manufacturing, factory, construction, electricity and water might incur six months opportunity losses worth P1.75 billion.
In order to recover such losses in this sector, the business leader said the government should spend on its build, build, build projects.
“The government is the biggest contractor as it pours billions of pesos for infrastructure,” Carbon said.
He added that private sector will also pour in its investments on construction once already allowed.
The chamber, on the other hand, believes it’s difficult to easily recover the service sector.
Based on its projection, the sector which includes real estate, rent, retail, public advertisement, banks, lending, insurance, telecommunications, transport, trading, tourism and business process outsourcing (BPO) will incur the biggest opportunity losses worth P12 billion.
“It will be hard. For one, tourism will not be there for sometime,” he said, adding that they are projecting that the tourism industry may not recover yet even up to the first quarter of 2021.
