Spend more on social services, gov’t urged

By Ephraim Aguilar
Inquirer Southern Luzon

LEGAZPI CITY--WITH THE GLOBAL ECOnomic crisis looking like it will be “deeper, broader and longer,” the government should prioritize social protection measures over a stimulus package, said Albay Gov. Joey Salceda.

Instead of the “big-jolt” spending of a stimulus package to pump life into a sickening economy, the government should spend more, but slowly, on basic social services, said Salceda, who is one of President Macapagal-Arroyo’s economic advisers.

Salceda, who spoke at the Bicol Regional Development Council meeting here, said the global economic slowdown is likely to last three years.

Salceda, who is the Bicol-RDC chair, argued for a change in the development framework, saying that in a stimulus response to the crisis, as in the P330-billion stimulus package, government resources could run out.

He said the government should focus on long-term projects, take advantage of low economic activity, and expand productive capacity while creating jobs to support incomes.

Salceda explained that in an economic crisis, demand—or the daily activity of buying and spending that keeps an economy going—weakens. Even if prices of goods are low, people do not have the money to spend.

If businesses and consumers would rather save than spend, then the government should do more of the spending, Salceda said.

“When everyone stops spending, only the government can take risks. When there is no demand, only the government can create demand,” Salceda said.

He said government should be doing the spending because it can afford to take big losses and its losses are spread out over the entire population and over time.

In the meantime, the governor advised people to be frugal spenders and businessmen to cut down on essentials.

He said people should build their skills to make themselves more marketable. With a report from Gil C. Cabacungan Jr.