Economy recovery seen in Q3
Philippine economy seen to recover by Q3
MANILA – Acting Socioeconomic Planning Secretary Karl Kendric Chua said the country’s economy will recover by the Third Quarter after its decline by 0.2 percent from January to March, the first contraction in 20 years after COVIN-19 affected almost every aspect of the economy including trade and investments.
At an economic briefing at late Thursday morning, Secretary Chia said the country faced unexpected and what he described as “significant socio-economic risks and shocks” during the first three months of the year. He said the first was Taal Vocano’s eruption in January, the decline in tourism and trade because of COVID-19 in February and the enforcement of Enhanced Community Quarantine (ECQ) or lockdown in Luzon with other local government units enforcing their own quarantine measures in March to contain the spread of the virus.
“This is the first time real GDP (gross domestic product) fell into negative territory since 1998 during the combined El Niño and Asian financial crisis,” he said during the virtual economic briefing.
He said COVID-19 has certainly posed serious challenges to the country’s strong growth and development prospects. It will be recalled the country’s GDP accelerated by 5.7 percent in the first quarter of 2019, and by 6.7 percent in the fourth quarter last year.
He, however expressed optimism the country may start reversing the economic trajectory by next month as it maximizes its testing capacity.
“So that by the second half of the year, we can fully recover. The idea here is that we use our politics and our collective effort to proactively shape our further into a recovery that looks more like a ‘V-shape’ so that by the end of the year, we will have a respectable economic performance,” he added.
He said the second-quarter economic performance “might be worse” with the full-month extension of ECQ in April, Chua added.
“The good news is, as of May 1, many areas of the country have moved to general community quarantine (GCQ),” he said. He added the main difference is, in the ECQ, the maximum number of people that can really work and the maximum value-added that the economy can operate is closer to 25 percent.
Under the GCQ, it is closer to 75 percent. What this means is that there is that there is a chance that we minimize the expected contraction in the second quarter. Against this backdrop, Secretary Chua said but achieving 6.5 percent growth by year-end would be difficult.
He believes the implementation of the Build, Build, Build infrastructure program and strategies will stimulate domestic demand to enliven the country’s economic performance.
In a related development, the Philippine Statistics Authority (PSA) said that the main contributors to the first-quarter economic growth decline were manufacturing, transportation and storage, and accommodation and food service activities.
Among the major economic sectors, agriculture, forestry and fishing, and industry contracted by 0.4 percent and 4 percent respectively. (Melo M. Acuña)
Acting Socioeconomic Planning Secretary and NEDA Director-General Karl Kendric Chua. (NEDA File Photo)