The Duterte administration’s chief economic manager said yesterday the country’s economy may contract deeper than expected this year due to a series of lockdowns imposed to contain the spread of the coronavirus.
Finance Secretary Carlos G. Dominguez III said the local economy, as measured by gross domestic product (GDP), is projected to shrink by 6.0 percent this year, a steeper contraction compared with an earlier estimate of 5.5 percent.
“For the entire year, we project our economy to contract by about 6 percent,” Dominguez said during a virtual Economic Forum yesterday.
The finance chief attributed the sharp decline on lockdowns that restricted movements within the economy and resulted in job losses.
“We have seen unemployment spike when the domestic economy was hindered by the lockdown. Our enterprises have borne the brunt of the economic downturn,” Dominguez said.
Asked if the inter-agency Development Budget Coordination Committee will revise its GDP forecast for the year, Dominguez said it is “under discussion.”
But Dominguez said he expects the economy will bounce back as mobility restrictions are further eased, and additional economic reform measures are rolled out to save pandemic-hit businesses.
He also said the government will raise its infrastructure spending under “Build, Build, Build” and hopeful the 2021 national budget will be passed on time by the Congress.
“Next year, we expect the Philippine economy to post a strong rebound. The challenges are large, but we are determined to build back a better economy that the Filipino people deserve,” Dominguez said.
He assured the Duterte administration has been doing all it can to balance its efforts to reviving consumer confidence and further reopening the economy with implementing health interventions to contain the infections.
“The Duterte administration’s aim is to pursue a safe new normal while we strive for a better normal. We cannot completely lock ourselves up to avoid COVID-19 at the expense of other vital dimensions of our lives. We should take less costly but effective measures,” he said.
The calibrated easing of mobility restrictions has led to improved numbers in terms of the unemployment rate, which dropped to 10 percent in July from 17.7 percent in April, when strict lockdowns were still in place to prevent the further spread of the coronavirus.
Manufacturing has also slowed down its contraction after the economy was gradually reopened, he said, while revenue collections by the Bureau of Internal Revenue and Bureau of Customs exceeded revised targets by 8 percent in the first nine-months of the year.
Dominguez expressed confidence that the nation can “outlast” the COVID-19 emergency as the government has been consistently exercising prudence in managing its fiscal affairs.