The Philippines’ economic managers expressed optimism that the country can return to a “solid growth and development trajectory” if the economy is enabled to recover by efficiently managing risks.
In a statement, the National Economic and Development Authority (NEDA) affirmed the positive outlook for the country despite the coronavirus pandemic.
“Our experience with COVID-19 over the past several months tells us two things,” noted Acting Socioeconomic Planning Secretary Karl Kendrick Chua.
He said the economy is “strong enough to recover, if we enable it to do so” and “our best recourse to help the economy is to manage risks.”
“Managing risks, instead of totally avoiding them, will allow us to safely open more of the economy and help Filipinos recover their sources of income,” said Chua.
“This will also put the Philippines back on its solid growth and development trajectory,” he added.
The NEDA chief said the smaller GDP contraction of 11.5 percent in the third quarter from a contraction of 16.9 percent in the second quarter indicates that the Philippine economy is on the mend.
“The path is clearer to a strong bounce-back in 2021,” he said.
Chua also pointed out that the still double-digit contraction in the third quarter did not come as a surprise given the return of stringent quarantine measures in the national capital, adjacent provinces, and Cebu City, which account for about 60 percent of the Philippine economy.
He said restrictions in public transportation prevented many workers from leaving their homes and reporting for work even if their industries are allowed to operate.
On a quarter-on-quarter basis, the economy grew by 8 percent in the third quarter, reflecting the return of economic activities as the quarantine was eased.
On the expenditure side, smaller contractions were recorded in household consumption, firm investment, exports, and imports. This signals that households and firms are recovering.
In particular, goods exports grew by positive 2.2 percent in September, as the economy of the country’s major trading partners in the region bounced back, notably China.
On the supply side, agriculture growth slowed to 1.2 percent, as the sector faced a number of plant and animal diseases.
These headwinds, however, had minimal effects on overall food supply as evidenced by falling food inflation in the same period.
Both industry and services also showed a smaller contraction, consistent with the initial recovery of employment, where some 7.5 million workers returned in the third quarter.
This reduced the unemployment rate to 10 percent in July from 17.7 percent in April, when the quarantine was at its strictest.
The administration of President Rodrigo Duterte has recently approved measures to further open up the economy in the fourth quarter, subject to enforcing the minimum health standards.
The Department of Trade and Industry and the Department of Transportation, respectively, have also issued guidelines to allow more sectors to expand capacity to between 75 and 100 percent and to increase public transport capacity using a combination of faster turnaround, service contracting, and following the “seven commandments” for safe public transportation.
Chua expressed that the economic team is hopeful that Congress will do its part to help the economy bounce back faster by passing the pending recovery bills within the year.
These are the 2021 General Appropriations Act, the Corporate Recovery and Tax Incentives for Enterprises Act, the Government Financial Institutions Unified Initiative to Distressed Enterprises for Economic Recovery Act, and the Financial Institutions Strategic Transfer Act.
