Metro Manila (CNN Philippines, July 8) – President Rodrigo Duterte’s economic managers believe the economy is showing signs of recovery, citing signs that activity has started to pick up.
After the 0.2 percent economic contractionduring the first three months of the year – which included the first two weeks of a Luzon-wide lockdown – the economy seems to be en route to a gradual recovery, the economic team says.
“The monthly data coming out on trade, on production are actually starting to show improvements. From the deepest contraction in April, we are seeing still a contraction in May, but improving,” Acting Socioeconomic Planning Secretary Karl Kendrick Chua said during Wednesday’s pre-State of the Nation Address forum.
“We are also seeing a significant part of the economy actually loosening up from the quarantine, so these are important elements to suggest that the economy is starting to recover,” he added. “How soon or how fast we reach positive territory depends on how we will proactively respond with our recovery program and how the public will respond by cooperating, maintaining the minimum health standards and ensuring that they care for each other.”
He added that the past three months have been used to beef up testing and contact tracing. Chua added that testing will be expanded to cover returning workers from abroad, even those not showing symptoms.
Finance Secretary Carlos Dominguez III said in a separate presentation that the recovery in Customs collections in June also showed a pickup in imports, suggesting brisker manufacturing activity compared to the previous months when most businesses were forced to close shop.
“The reality is that this virus will not go away until a vaccine is found. In the meantime, we must get back to work while staying safe,” Dominguez said in his speech.
He added that Metro Manila and Calabarzon, which collectively account for two-thirds of domestic output, should reopen as soon as possible to help boost activity. These areas remain under strict general community quarantine controls, with certain buinesses allowed to partially reopen.
The government earlier estimated losses due to the pandemic at ₱2 trillion, which could lead the economy to shrink by as much as 3.4 percent this year – the first time since 1998.
When asked if the government had taken any missteps in fighting the pandemic, Dominguez said: “The answer is no.”
Chua said that about 75 percent of the local economy has reopened, from a low of just 25 percent back when strict stay-at-home rules were enforced from March to May to fend off further infections.
There are 47,873 confirmed cases in the country as of Tuesday afternoon, of which 12,486 patients have recovered and 1,309 have died. More than 30,000 remain active cases, according to the Department of Health.
The government has been working to ease restrictions despite rising infections, with Malacañang admitting that the government has no other choice but to reopen economic activity. The focus now should be regaining consumer confidence so they can return to their offices and start going out to spend again, Dominguez added.
However, Bangko Sentral ng Pilipinas Governor Benjamin Diokno on Tuesday admitted that the rebound to growth will take a U-shaped path, admitting that output is “likely to contract further in the remaining quarters of 2020.”
By 2021, Diokno said the low base and revival in consumption could push growth to between 8-9 percent for the year.