THE Philippines is offering one of the smallest fiscal packages in Asia in response to the economic impact of the pandemic, Nomura Global Research said in a note Friday.

“Aggregating all measures, the most support has been announced in Singapore, Malaysia, Australia and Korea, and the least in Indonesia, China and the Philippines,” Nomura Global said.

It added that the Philippine pandemic measures amount to about 5% of gross domestic product (GDP), against Singapore’s 19.2% and Malaysia’s 17.7%. Bringing up the rear were Indonesia (4.2%) and China (4.9%).

A database maintained by the Asian Development Bank (ADB) estimates the Philippine fiscal response at $19.823 billion as of May 18 or about 4.53% of the economy.

The Philippines has so far implemented a P200-billion social amelioration program for some 18 million low-income families, a P51 billion in wage subsidy for employees of small businesses, a recovery program of about P130 billion to P160 billion over three phases to provide support for businesses.

After the crisis in 2020, the Philippine fiscal deficit is expected to rise to about 8% of GDP, against 3.55% in 2019, according to Nomura Global.

“A significant fiscal deviation and a sluggish recovery suggest that it will take longer for economies to revert to their initial fiscal positions,” it said.

Nomura Global also said that fiscal measures are unlikely to boost growth as economic activity remains severely disrupted. However, such measures are needed to ward off permanent economic damage caused by the outbreak.

Nomura Global said it expects central banks to be more proactive through aggressive secondary-market bond purchases, relief measures, and liquidity support. However, catch-up fiscal action is still needed, it said.

“We do not mean to downplay the role of monetary policy… Monetary accommodation may be necessary, but it is unlikely (to be) sufficient on its own,” it said. — Luz Wendy T. Noble