Palace concerned by sharper than expected drop in GDP
MANILA, Philippines — Malacañang on Thursday expressed concern over the steeper-than-expected economic contraction but remains optimistic that the sectors worst hit by the pandemic would recover because of the government's proposed stimulus package.
The Philippine economy plunged by a record 16.5% in the second quarter, entering into a recession or two consecutive quarters of economic contraction for the first time in 29 years.
The drop, which was way worse than the revised contraction of 0.7% in the first three months, has been tied to the lockdowns that shut down the economy and displaced thousands of workers.
"While we understand that the decrease in our gross domestic product growth rate (sic) is a result of the enhanced community quarantine [and] modified enhanced community quarantine, we are concerned by the steep drop which is much worse than what our government economists had expected," presidential spokesman Harry Roque said in a statement.
"Our resolve to recover at the soonest possible, however, remains strong. Ingat buhay para sa hanapbuhay is our battlecry," he added.
Better performance seen in second half
Citing a report from the Philippine Statistics Authority, Roque noted that the main contributors in the economic slump were the decline in manufacturing, construction, and transportation and storage, sectors that were greatly affected by the lockdown.
"We expect an improvement in the performance of these sectors during the second semester of the year, with our gradual reopening of the economy, as well as our proposed stimulus measures," Roque said.
Economic managers, Roque said, have crafted a "phased and adaptive" economic recovery program called the Philippine Program for Recovery with Equity and Solidarity or PH-Progreso to counter the pandemic’s effects on business and livelihood.
"We have likewise recalibrated our budget for next year and restarted our 'Build, Build, Build' programs, subject to health and safety protocols, to create jobs," the Palace spokesman said.
"The Palace is aware of the hardships and the sufferings of our people. We thus provided an emergency subsidy program, which is considered the largest single relief program in the country’s history, when we took the painful choice of imposing the strictest quarantine measure on our people," he added.
Malacañang also urged Congress to approve the second phase of the Bayanihan Act and the bill providing tax perks to businesses to mitigate the economic impact of the crisis.
"We reiterate the President’s call to Congress to fast track the passage of Bayanihan II, or the Bayanihan to Recover As One, which would boost our second-semester offensive against COVID-19; and the Corporate Recovery and Tax Incentives for Enterprises or CREATE Act to help businesses recover and generate employment for our people," Roque said.
"We assure everyone that the government will continue working round the clock to strengthen our resilience and bring us back to the path of inclusive growth," he added.
Roque reiterated that the Philippines is not the only hit by the effects of the coronavirus disease 2019 (COVID-19), which has so far infected more than 116,000 persons in the country. He said the pandmeic has had an adverse economic impact on countries like Singapore, Indonesia, the United States, France, Spain, and Mexico.
Lockdown defended
Presidential Communications Secretary Martin Andanar defended the government's decision to impose lockdowns, saying it helped safeguard public health and prevented the spread of the virus.
"Although our lockdown and community quarantine implementation had an impact on our economic performance, it served as a cushion to our society’s general health, protection, and well-being against COVID-19," Andanar said in a statement.
"Furthermore, it served as a safety net to suppress the collapse of our healthcare system and assist our frontline healthcare workers, who have been tirelessly responding to the pandemic since it began," he added.
Andanar said the quarantine measures prevented an estimated 1.3 to 3.5 million cases, which would have overwhelmed the country's healthcare system. The move also saved some 59,000 to 171,000 lives, he added.
"It is worth noting that while facing this crisis, we are now in a much stronger economic position to address such circumstances in the long-term," Andanar said.
"Apart from strong economic foundations established by the successful enactment of economic, social, and institutional reforms, we continue to capitalize on and to reform our socio-economic advantages so that we can weather any potential, foreseen, and unforeseen crisis, such as the COVID-19 pandemic," he added.
Andanar said the government would continue to strike a balance between supporting the economy and ensuring everyone’s protection, especially that of health workers.
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