MANILA: The Philippines sank into recession after its largest recorded quarterly contraction, he said Thursday, as the economy recovers from coronavirus blockades that have destroyed businesses and left millions of people out of work.
Gross domestic product fell 16.5% year-on-year in the last quarter, the Philippine Statistics Authority said, as the country underwent one of the world’s longest housing claims to curb the spread of the virus that has devastated economies around the world.
It followed a revised contraction of 0.7 consistent with a penny in the first 3 months of the year and marked the biggest drop in economic activity since ferdinand Marcos’ 1981 record broke. This is the country’s first recession in three decades.
The outlook for the archipelago is bleak, with the number of coronavirus infections exceeding 115,000 this week, a buildup more than five times since early June, when the restrictions that crippled the economy were eased.
“There is no doubt that the pandemic and its negative effects on the economy are putting the economy as never before,” said Acting Socio-Economic Planning Secretary Karl Chua.
“But beyond crises, the Philippines is now in a much more powerful position to deal with the crisis.”
As fitness personnel struggle to cope with the influx of patients, more than 27 million people in Manila and 4 surrounding provinces on the main island of Luzon, which account for more than two-thirds of the country’s economic output, have returned to a partial level of emergency closure. for two weeks on Tuesday to relieve tension in hospitals.
But President Rodrigo Duterte, who was reluctant to tighten restrictions after millions of others lost their jobs on the first close, warned that the country might not remain closed any longer.
“He’s got no cash left. I can’t give food or money to people anymore,” Duterte said on Sunday.
The country’s economic difficulties have been exacerbated by the decline in remittances from the legion of Filipinos who usually send cash to their families each month, fueling customer spending, the main driving force for growth.
Remittances fell 6.4% in the first five months, last year’s so-called central bank said, as thousands of sailors, cleaners and structural staff lost their jobs and returned home.
Consumer spending in the quarter fell by 15.5%, according to the statistics agency.
“This will be a complicated path to recovery, as trade-offs between economic recovery and fitness will remain a major challenge for the public and personal sectors,” said Emilio Neri, senior economist at the Bank of the Philippines.
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