'We Need a Bazooka, Not a Pistol': Razon Suggests Pumping at Least 20 Percent of GDP Into Economy to Save MSMEs

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“Whether it’s infrastructure, loans, or liquidity, we need a bazooka, not a pistol,” said Enrique “Ricky” Razon, chairman and president of International Container Terminal Services, Inc. (ICTSI) and one of the leading businessmen in the country.

Razon was referring to government stimuli needed to revive the Philippine economy and support its struggling businesses. He made the comments during Go Negosyo’s Micro, Small, and Medium Enterprises (MSME) Conference.

The private sector segment was led by Karen Davila who moderated the discussion with the Philippines’ top CEOs and business leaders. Razon was joined by Jaime Augusto Zobel de Ayala, chairman and CEO of Ayala Corporation; Teresita Sy-Coson, co-chairman of SM Investments; and Tony Fernandes, CEO of AirAsia.

The leaders of the Philippines’ biggest businesses shared their two cents on what smaller businesses needed to do and receive to survive the pandemic, particularly on how government spending can drastically help the situation.  

“The government will have to pump or spend [via] the stimulus at least 20 percent of the GDP,” Razon stated. “Whether the central bank has to follow the footprints of the (US) federal reserve and the ECB (European Central Bank) and start printing a little bit, because we have enough leeway and headroom to print some money. I’ve been telling (Finance) Secretary Dominguez this, but he has to grapple with the whole bureaucratic system to execute things like this. But I think 20 to 25 percent of the GDP is what is necessary for a consumption-based economy.”

Earlier in the conference, Razon said he anticipated the Philippines would be the hardest hit economy in Southeast Asia due to the nature of our economy.


“It was very clear to me from the beginning of this that the Philippines would be the hardest hit because we’re the largest consumer economy. The pandemic specifically attacks the consumer,” explained Razon, who also noted that the countries surrounding the Philippines have larger manufacturing industries in comparison.

The head of ICTSI also pointed out something that’s gone largely unnoticed: The stock markets are still functioning.

“What hasn’t happened in this pandemic is the global financial system and equity markets have not collapsed. They remain highly liquid. And as you notice, when crises like this hit, you have this huge sucking sound of liquidity being sucked out of emerging markets, going to safe havens,” said Razon. “On the other end of this, the more developed world will have slower growth than emerging markets when this is all over. And you will have all that liquidity start to come back here to emerging markets.”

Razon believes that if a company can survive 2020 and 2021, they will be rewarded in 2022 when the economy is expected to boom. Historical evidence has shown that times of crises, which usually last up to two years, are followed by great economic growth, as proven by the 1918 Spanish flu, which was followed by the roaring ‘20s.

What is their forecast?

“I think 2020 is absolutely written off,” claimed Razon. “I suspect the situation won’t stabilize until the end of 2021. And 2020 is the year I expect people will recover, and you will see a lot of pent-up (consumer) demand in the world.”

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2022 is still more than a year away, so the goal for small businesses now should be to focus on survival and opportunity instead of growth, says Razon.

“For some, you have to survive the crisis before you can help others, and for others, this is a great opportunity. That’s the way these things work,” added Razon, who added that big businesses can help smaller businesses by making more deals as big businesses will likely survive this pandemic.

Ayala's CEO chimed in, concurring that public and private sectors will need to work together to survive the next few months, explaining that the economy is like an engine, and all of us have to add gasoline and oil to keep it going.

“We are depleting our resources deliberately in order to survive this. I am on Ricky’s side on this. All of us have to use our balance sheets to kick start the economy again,” said Zobel de Ayala. “They have been putting stimulus on the table but demand has to kick in. We all have to use our balance sheets to kick start the economy. There is no way around it.”

Meanwhile, Sy-Coson reiterated the importance of government spending in this equation:

“We look up to Ricky to tell the government what our sentiments are. He knows what we need, and I just hope the government understands the things that we are hoping for in the private sector. We are all doing what we can in our ecosystems. But we also need the government to help, open up areas such as logistics so there is freedom of movement.”


Fernandes of AirAsia, part of the hard-hit travel industry, added that the “bazooka” moment will be if we can vastly improve testing methods, which can lead to a more mobile society and economy. As Fernandez points out, the vaccine won’t be available for a while, and it is time to start learning to live with the pandemic in order to overcome it.

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Anri Ichimura
Section Editor, Esquire Philippines
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