Philippines on its way to recovery – DOF

MANILA, Philippines — The Philippines is on its way to recovery after slipping into a pandemic-induced economic recession last year due to the impact of the pandemic, according to the Department of Finance (DOF).

In his latest economic bulletin, Finance Undersecretary and chief economist Gil Beltran said that based on the seasonally adjusted national income accounts, the country’s gross domestic product (GDP) grew by 5.6 percent in the fourth quarter of 2020 from eight percent in the third quarter of 2020.

This, after the economy contracted by 5.6 percent in the first quarter of last year and 14.9 percent in the second quarter of 2020.

“Seasonally adjusted figures, however, indicate that the economy might be well on its way to recovery,” Beltran said.

To sustain growth, the chief economist said the country has to maintain and enhance its capacity, medical or otherwise, to manage the health risks posed by the virus.

“Such capacity could tilt the odds in what is apparently a life-versus-livelihood dilemma and make it more of a life-and-livelihood dual outcome, but probably at a lesser scale than before under a new normal should there still be uncertainties about and risks posed by the virus,” Beltran said.

The economy stalled as Luzon was placed under enhanced community quarantine in mid-March to slow the spread of the pandemic.

As a result, the Philippines slipped into recession with a record GDP contraction of 9.5 percent, ending 22 years of positive economic growth.

“From a macroeconomic fundamentals point of view, the pandemic found the Philippines in the position of strength; the story would have been different had this pandemic struck in the early 2000s when the country was still reeling from the deleterious effects of the 1997 Asian financial crisis,” Beltran said.

The slowdown eased to 11.4 percent in the third quarter of 2020 and further to 8.3 percent in the fourth quarter of 2020 from a record 14.9 percent in the second quarter of 2020 as the economy partially reopened when the National Capital Region (NCR) shifted to general community quarantine in June last year.

“The health issues posed by the COVID-19 epidemic likewise continue to pose challenges to economic activities,” Beltran said.

Beltran said the DOF would continue to work with legislators to pass major economic reforms to help the country recover from the pandemic-induced recession.

The administration also continues to pursue major infrastructure projects under the Build Build Build program.

“Together with the continuing infrastructure program, these economic reforms will give the economy a big shot in the arm and would have a knock-on effect on employment and real wages,” Beltran said.

The DOF is pushing for the enactment of economic legislation such as amendments to the Public Service Act, Retail Trade Liberalization Act, and Foreign Investment Act, as well as fiscal bills, including the Corporate Recovery and Tax Incentives for Enterprises Act (CREATE), Financial Institutions’ Strategic Transfer (FIST) and the Government Financial Institutions Unified Initiatives to Distressed Enterprises for Economic Recovery (GUIDE).