MANILA, Philippines — The Duterte administration can still afford to unleash a bigger pandemic stimulus, thanks to still “sufficient” fiscal space that the government should use to prevent a massive economic scarring. “The debt stock buffer was still large enough for the government to undertake discretionary fiscal policy measures to support the economy without significantly risking debt sustainability,” AMRO said. “Given the large negative output gap and the moderate fiscal policy space available, more expansionary fiscal policy measures are deemed appropriate should the economic recovery falter or weaken,” it added. For AMRO, this only increases the urgency for the government to take advantage of its remaining fiscal policy space. “While it is important to preserve some policy space in a highly uncertain environment, sufficient fiscal support is essential to expedite the recovery, revitalize economic activities and confidence, and support livelihoods,” it said.

Source: Philippine Star June 29, 2021 05:51 UTC