Philippine economy shrank 9.5 percent in 2020

MANILA, Philippines, January 29 ------ The economy contracted by a record 9.5 percent last year, buckling under the stress of a prolonged pandemic lockdown and a spate of natural disasters that hit the country during the year. Decline in the gross domestic product, a measure of economic output, in 2020 was the sharpest since government GDP data began in 1946 and seconded only by the seven percent contraction in 1984 during the Marcos regime.

“It is really a result of the pandemic,” presidential spokesman Harry Roque said at a press briefing, reacting to the latest economic data. “The good news is, while we are still in the negative territory, our economy improved. From (contraction of) 16.9 percent at the height of our lockdown, it became 11.3 and then 8.3 during the last quarter,” he said. “We are happy that somehow, because of the opening of the economy, our economy is gradually improving,” he added.

Roque nevertheless admitted that the improvements are not enough to bring back normalcy and address hunger in the country. “We can still open (the economy) even if there is a new variant. We just have to wear masks, wash hands frequently, and observe physical distancing. If we do not open the economy, many will go hungry,” he added. Roque explained that growth projections of economic managers would be realized if the economy is reopened.

“The decision on whether we would end hunger lies on us. If we are negligent, the economy won’t be opened. Metro Manila, which accounts for 60 percent of our GDP won’t be downgraded to MGCQ (modified general community quarantine) and we won’t be able to recover,” he said. The contraction settled within the lower end of the estimate of the Development Budget Coordination Committee (DBCC) of between 8.5 percent and 9.5 percent. This compared with the pre-pandemic growth level of six percent in 2019.

With the country’s projected population of 109.1 million, per capita GDP contracted by 10.7 percent in 2020. In the fourth quarter of the year alone, the economy contracted at a slower pace of 8.3 percent coming from the revised 11.4 percent decline in the third quarter as restrictions were gradually eased and seasonal demand kicked in. This compared with growth of 6.7 percent in the fourth quarter of 2019. On a quarter-on-quarter basis, the economy grew by 5.6 percent in the fourth quarter of 2020.

“This improvement was the result of the further reopening of businesses and wider accessibility of public transport since October 2020,” said acting Socioeconomic Planning Secretary Karl Chua at a briefing yesterday. “However it also shows the limits of economic recovery without any relaxation of our quarantine policy,” he added. “If we do not open the economy, many will go hungry,” Roque said at Malacañang. “We can still open (the economy) even if there is a new variant. We just have to wear masks, wash hands frequently, and observe physical distancing.”

Source: philstar.com