CREATE law to offset ECQ economic losses

The newly approved Corporate Recovery and Tax Incentives for Enterprises (CREATE) law will definitely offset whatever economic losses the two-week enhanced community quarantine (ECQ) in the National Capital Region (NCR) may inflict, Rizal Commercial Banking Corp. (RCBC) chief economist Michael Ricafort has assured.

In a recent report, Ricafort said the CREATE law, the biggest  biggest stimulus package by the government, is projected to boost economic growth by at least 0.5% to 1% annually. 

Ricafort said an increase in the government’s infrastructure investment will likewise help nrgate the impact of the ECQ. The new law, economic managers said, would allow businesses to have more funds for their operations, thus spurring economic activities.

While the ECQ would slow down economic recovery prospects, it would ease pressures on the peso, Ricafort added, estimating the economic impact of the two-week ECQ in the NCR, slated from August 6 to 20, to be 0.5 percent of the gross domestic product (GDP) per week. 

He also noted that the lockdown coincides with the ghost month of August, which in some Eastern Asian countries, means fewer economic activities.

“This is way better compared to the height of the hard ECQ lockdowns last year when the economy was almost at a standstill and almost no public transportation, so that the hit on the economy was bigger at close to P20 billion per day, or P140 billion or close to 1% of GDP per week,” he added.

Malacañang recently announced the implementation of the ECQ that follows a weeklong general community quarantine (GCQ) with heightened restrictions in the NCR from July 30 to August 5. 

Heightened quarantine levels will also be up in several provinces as the government strengthens measures against the further spread of the Covid-19 vurus Delta variant which is reportedly more contagious. 

Ricafort admitted it would be a delicate balancing act for the government to address the rise of Covid-19 infections while mitigating the impact on the economy.