MANILA – As the Philippines is in a frenzy trying to stem the tide of the Covid-19 pandemic and readying the vaccination of millions of Filipinos, President Rodrigo Duterte, backed up by his economic team and business leaders, admitted this week the bitter truth – the Philippines is in a sink hole as it is losing P2 billion a day due to pandemic.
“We are sinking deeper and deeper,” the Chief Executive stressed during his address at a public briefing with Sen. Christopher Lawrence Go and several Cabinet members led by Finance Secretary Carlos Dominguez, Defense Secretary Delfin Lorenzana, Health Secretary Francisco Duque and Vaccine Czar Carlito Galvez.
While making the admission that the Philippine economy is in bad shape, Duterte pointed out that many other countries were also suffering economically due to the crisis which had triggered lockdowns, closure of businesses and industries, halted tourism and schools, among others.
The Chief Executive claimed that the country’s economy was doing well before the pandemic struck early last year. At press time, more than 530,000 Filipinos have been infected by the Covid virus.
“Araw-araw, we are losing P2 billion na pera na para sana ‘yun sa tao. (Every day, we are losing P2 billion worth of money which should’ve been for the people). The workers, the Filipino workers would have earned that money kung ang ekonomiya natin gumagalaw,” he said in his address in public briefing.
Duterte, at the same time, assured his administration is doing its best “to keep us afloat” after it contracted by a record 9.5 percent in 2020.
“We are sinking deeper and deeper pero hindi lang rin tayo (but it’s not just us)…Pero (But) we are trying our very best to keep us afloat. Ang ekonomiya natin, mga kabuhayan, masama talaga. Biro mo naman, ilang taong walang trabaho (Our economy, our livelihood is in bad shape. Many people lost their jobs). The economy of the Philippines is in bad shape but as I have said, it is not only the Philippines who suffers. We in the world are suffering with everybody,” he said.
Citing Finance Secretary Carlos Dominguez III, he said Filipino workers lose a daily income amounting to P2 billion due to pandemic-related lockdowns.
Duterte appealed to the public to keep their faith in his administration, noting that government is doing its best to balance Filipinos’ health and the economy.
On Jan. 28, the Philippine Statistics Authority said the local economy, as measured by its gross domestic product (GDP), sank by 9.5 percent in 2020, the nation’s worst economic performance since after World War II.
Economic managers are optimistic that the Philippine economy will recover this year as it eyes to roll out its large-scale vaccination program starting this month.
Presidential Spokesperson Roque, however, expressed optimism about the country’s recovery this year, saying the economic growth is projected to reach 6.5 to 7.5 percent in 2021 and 8 to 10 percent in 2022 if the reopening of the economy will be sustained.
“Inaasahan natin next year kung patuloy ang pagbubukas ng ating ekonomiya, ang estimate ng ating economic planners ay magiging positive tayo (We expect that by next year, if the opening of the economy will continue, our economic planners estimated positive growth),” he said.
He reminded the public to continue to observe health protocols, such as wearing of face masks, face shields, frequent hand-washing, and physical distancing from others, to curb the spread of the coronavirus.
Vaccine czar, Secretary Carlito Galvez Jr. said the country has locked in 106 to 108 million doses of Covid-19 vaccines after he signed five term sheets with manufacturers.
The Philippines hopes to secure some 148 million doses, aside from the 40 million doses that will come from the World Health Organization-led Covax Facility, to inoculate an initial 50 to 70 million Filipinos this year.
Sergio Ortiz-Luis, president of the Employers Confederation of the Philippines (ECOP), bewailed that the country “relies too much on lockdowns” and restrictions to curb the pandemic, arguing the casualties of the deadly disease were far fewer than the number of cases in the Philippines.
Other business leaders warned of a slowed growth for the Philippines, saying full recovery could take four to five years if the country will not relax foreign ownership and accelerate consumption.
Calixto Chikiamco, president of the Foundation for Economic Freedom, said the country’s GDP per capita may only go back to pre-pandemic levels within 4-5 years if economic reforms do not push through.
He added that regaining the lost value of the local economy may take two to three years.
MANILA – With the Philippine economy reeling after four consecutive quarters of negative growth last year, the expected first quarter of 2021 may not provide the recovery necessary to prevent a full blown depression from taking place.
Already officially under a recession, the country is seen to lose P700 million (about $14.6 million) daily with the new Covid-19 variant expected to keep Metro Manila and other regions like Cebu under general community quarantine (GCQ).
Acting Socioeconomic Planning Secretary Karl Chua said at the start of this week that the Philippines would continue to lose P700 million per day in wages and other income due to the GCQ, which will remain in effect until the end of this month, at the very least.
Chua, who also heads the National Economic and Development Authority, said the contraction of the economy is likely to continue in the first quarter of 2021 because “nothing significant will change.”
After February, however, Chua said “we should be in a better position to relax further” and restrictions can be relaxed.
The Philippines’ gross domestic product shrank by 9.5 percent in 2020 and signs indicate the first quarter of 2021 to be off to a slow start.
But Chua insisted that the country can still attain its targeted growth of between 6.5 to 7.5 percent this year once the vaccines against Covid-19 are rolled out.
Last year, in tourist income alone, the Philippines lost an estimated P400 billion ($8.333 billion)
Travel and tourism had been considered a sunshine industry before the pandemic. In 2019, the Philippines welcomed 8.3 million foreign visitors, but this plunged to just 1.3 million last year.
As a result of the severe drop in visitors to the country, 5.7 million jobs were affected.
Because the tourism industry provides countless downstream jobs, the effect of the crash could be deemed catastrophic.
Just for local travelers, the industry had become a P3 trillion ($62.5 billion) market prior to the global pandemic, according to Tourism undersecretary Roberto Alabado.
As a result, countless hotels and resorts were forced to either suspend operations or shut down entirely. The biggest casualty among the top hotels is the Makati Shangri-La, which shut down its flagship hotel this week.
The woes expanded to the travel sector, and Philippine Airlines was finally forced to announce that it would retrench 2,300 employees by mid-March.
The country’s unemployment rate had eased to 8.7 percent by yearend last year, or around 3.8 million jobless Filipinos. The worst level was reported last April, when it soared to 17.6 percent, then down to 10 percent in July, 2020.
While the government’s economic planners have avoided use of the dreaded wore “depression,” this may be unavoidable as economists define four consecutive quarters of negative growth as a depression.
Two consecutive quarters of negative growth is described as a recession, and the Duterte administration’s economic team has not shied away from the term because recessions are usually easy to recover from. (with Beting Laygo Dolor)