Viable Solutions to the Economic Crisis by Ronan S. Estoque, DPA

Right off the bat, the impact of the economic crisis could be easier if the Philippine government – particularly this administration would follow this simple but viable directions. This is not revolutionary and this is even quite easy to follow.

The problem however, aside from the current economic crunch, is execution. Most of the problems at hand have an easy solution; the difficulty however is in the implementation of the solution or what they call “execution”.

Solutions to whatever difficulties we face are quite easy to handle, more often than not, everyone with an average intellect always have an option to pursue towards solving whatever impediment is placed before their perceived redemption.

When the problem is psychology, then the solution is also psychological. For this exercise however, the problem is economics and surprisingly – the solution is also economics.

When people do not have confidence, it is imperative for the government to spend more, to stimulate the economy. Spend more in infrastructure, in social services and above all else, in education. Hire more teachers, build more classrooms, train the teachers, and consciously build confidence by spending more to boost market stability.

Directly, this would stimulate the economy and stabilize its condition. A very good example of this approach is the rice debacle early this year. People were falling in long stretches of line just to purchase NFA rice; there was no money for the rice problem but the government persisted in subsidizing the price of rice and when people realized that hoarding only increases the price of rice, prices started to seek its own level and eventually came down.

Tax less. By taxing people less, means more money in their pocket and inevitably, this means more spending money. When people spend, the economy is stimulated. More goods are bought as well as services. By taxing less, the economy is actually protected and the market psychology tends to favor a potential bull run for the market, all in the hope and intention of weathering this economic difficulty.

The market paradox is that by taxing less, it shows governmental prudence, and whatever bear scare/scenario is in flavor, the present thrust is adequate to deal with the unwanted but inevitable market jitters.

Spend more and Tax less.