DTI chief: Economy starts to recover; COVID-19 surge shouldn't be blamed on biz reopening

MANILA, Philippines — The pandemic-battered Philippine economy is starting to recover, the trade department said, as it maintained that the recent surge in COVID-19 infections should not be blamed on the reopening of businesses.

Trade Secretary Ramon Lopez noted that the economic contraction has become less steep, improving from a decline of 16.5% in the second quarter to 11.4 in the third quarter and to 8.3% in the last quarter of 2020.

"The economy is just starting to recover... Hopefully the improvement will continue until we achieve growth," Lopez said during a meeting of the government's pandemic task force last Wednesday.

The Philippine economy shrank by 9.5% last year, the steepest economic decline since 1947. The pandemic has also forced several businesses to close, displacing thousands of workers and prompting the government to allocate billions in aid to households affected by lockdowns.

Lopez said the unemployment rate has also eased from a high of 17.7% in April to 8.7% in October.

"This (unemployment rate) is slowly going down. That means, many have returned to work...But this is still far from the 5.3 (unemployment rate before the pandemic) so we are working to bring back those who have not yet returned to work,"  the trade chief said.

Lopez said the manufacturing sector has grown, with the Philippine manufacturing purchasing managers’ index (PMI) hitting 52.5 in the last two months. The headline PMI dropped to 31.6 in April during the height of the health crisis. Exports have also recorded positive growth in recent months, he added.

Lopez said business name registrations have also increased by 44%, with e-commerce business registrations reaching 88,000.

"Investments also continue to grow despite this pandemic. Last year, we hit... P1.02 trillion (in total approved investments)... In January to December 2020, despite the pandemic, we still reached a trillion level," the trade chief said.

For the first quarter of 2021, total approved investments rose by 64.65% to P137 billion.

Lopez said the government has ordered the temporary closure of some establishments because of the recent surge in infections but other parts of the economy are allowed to remain open.

"We are limiting the potential risks... to allow other parts of the economy to open and safely continue... But to clarify, the surge is not attributed to this," Lopez said.

"So our economy is slowly recovering. We started to reopen last July so we have seen these improvements. We also noticed that when the economy started to reopen in July last year, the COVID cases went down. This is contrary to fears of many people that cases will increase if we reopen the economy," he added.

Lopez pointed out that despite the reopening of the economy last July, the number of daily new infections went down to below 2,000 from 4,000.

Citing a statement by the World Health Organization, Lopez said the increase in the number of new infections can be tied to the more infectious virus variants, the more frequent non-essential gatherings, and “vaccine optimism,” wherein people became more confident about leaving their homes even if they have not been inoculated.

Metro Manila, which contributes one third of the Philippine economy, and the nearby provinces of Bulacan, Cavite, Laguna and Rizal have been placed under a stricter general community quarantine for two weeks to address the soaring number of pandemic infections. The restrictions, which took effect last March 22 and will be implemented until April 4, include prohibiting non-essential travel into and out of the capital region and the four provinces and mass gatherings. The government aims to reduce the number of daily new COVID-19 cases by 25% in two weeks.

Lopez also reported that the government is working to produce and distribute 47,047,788 face masks to the poor so they can comply with safety protocols. He said 13.67 million face masks have been produced while more than 12 million others are about to be delivered to the intended recipients.