The Philippines, along with the rest of the world, suffered considerable contraction of its economy because of the COVID-19 pandemic.
In its October, 2020, Economic Update for East Asia and the Pacific, the World Bank said it expects the Philippine economy to contract by 6.9 percent in 2020. But it should rebound to a growth of 5.3 percent in 2021 and to 5.6 percent in 2022.
Earlier, last June, three months after the start of the Enhanced Community Quarantine (ECQ) lockdown in Metro Manila and the rest of Luzon, the World Bank had forecast a contraction in the Philippine economy of 1.9 percent for 2020, with faster rebound of 6.2 percent in 2021 and 7.2 percent in 2022.
Events between the June report and the October report were obviously so dismal that the economy plunged much deeper than expected. The country underwent a series of lockdowns of varying severity on economic activity and on individual movement.
From the original ECQ, Metro Manila eased to Modified ECQ (MECQ), then to General CQ (GCQ), back to MECQ when our frontliners, overwhelmed by the growing number of hospital cases, asked for a “time-out.” Today, six and a half months since the start of the lockdowns, Metro Manila remains under General Community Quarantine (GCQ).
All these various levels of quarantine were instituted to restrict the movement of people so as to hold back the spread of the COVID-19 virus. But with people told to stay at home, all business operations had to stop.
Shops and restaurants, salons and bars, groceries and malls, buses and planes — all had to close down and, therefore, had no income that normally is counted as part of the Gross Domestic Product (GDP). Remittances of Overseas Filipino Workers, another major contributor to GDP, were down.
Because of the lockdowns, our deaths and infections in the Philippines have not been as much as in some nations like the United States, Brazil, India, Iran, Italy, Spain, and United Kingdom. But now we must face the economic impact of the COVID-19 pandemic – as expressed in huge drops in percentages forecast by the World Bank. All the economic losses will be felt in at least the next two years, according to the World Bank.
This is now what we must plan for in the next two years, starting with the National Budget which is now pending in Congress. Now more than ever, the “Build, Build, Build” program will be a key part of the rebuilding of our economy.