Economy likely contracted 8.5% in Q4

MANILA, Philippines — Economic decline in the fourth quarter of 2020 likely continued to slow down, but nonetheless remained steep because of remaining restrictions, according to  London-based Capital Economics. 

In a research paper issued over the weekend, the think tank said the Philippines’ fourth quarter 2020 gross domestic product (GDP) likely contracted by 8.5 percent coming from a decline of 11.5 percent in the third quarter of 2020. 

This reflects the effects of the continuing easing of restrictions since the third quarter on business activity. 

Even as more businesses resume operations or regain capacity, the continuing lockdown restricts growth. 

“Google Mobility data suggest that restrictions on movement and social distancing remain a major drag – much more so than elsewhere in the region,” said the firm. 

“There has been a continued recovery in exports, which has helped industry, but output remains well below pre-crisis levels due to the weakness of domestic demand.” 

The government will announce the latest economic performance figures this week. 

Economic managers expect a slower decline coming from the third quarter because of the holiday season. 

The series of strong typhoons that visited the country in November last year, however, is expected to have aggravated the decline. 

The country remains under the world’s longest continuing lockdown meant to control the spread of COVID-19. Schools are still shuttered and many businesses operate in limited capacity in keeping with social distancing measures. 

To support the recovery in consumption, the government is considering to ease the age bracket of persons allowed to go out of their homes to support family-oriented spending.