Trade and Industry Secretary Ramon M. Lopez expects the decline in the country’s GDP and unemployment rate will further slowdown to single digit in the last fourth quarter of this year as the economy continued to reopen.
“We’re hoping for a single digit decline by the fourth quarter,” said Lopez at the Go Negosyo Angat Lahat. From a high of negative 15.5 percent in the first quarter, the GDP decline went down to 11.5 in the third quarter.
The domestic economy was growing 6-7 percent annually and was projected to grow at this rate 6 to 7 percent until the COVID-19 pandemic struck.
With the pandemic, the Duterte administration expects the economy to shrink as much as 6.6 percent this year. The economy needs to grow 6.6 percent in the final three-months of the year to hit an average of 5.5 percent contraction for 2020, which National Statistician Claire Dennis S. Mapa admitted is no longer feasible.
Another encouraging economic indicator is the growth in exports with the latest positive 2 percent from what used to be a 50 percent contraction during the height of the lockdown.
“The economy is gradually going back and if we continue to reopen more sectors, more of our fellow Filipinos will be employed,” he added.
Likewise, Lopez expects the country’s unemployment rate to slowdown to single-digit in the last quarter. As the economy opens wider, Lopez said the country’s unemployment is also expected to further slowdown.
Unemployment rate eased to 10 percent in July from 17.7 percent in April, when the quarantine was at its strictest.
Earlier , Acting Socioeconomic Planning Secretary Karl Kendrick T. Chua said the reimposition of stricter community quarantine in Metro Manila as adjacent provinces and Cebu City in the third-quarter took a heavier toll on the economy.
“The double-digit contraction in the third quarter is not surprising given the return of more stringent quarantine measures in NCR and neighboring provinces, and Cebu City, which together account for around 60 percent of the Philippine economy,” Chua said.
Metro Manila, adjacent provinces, and Cebu City account for around 60 percent of the Philippine
economy.
He also said restrictions in public transportation had dragged down the economy as it prevented many workers from leaving their homes and reporting for work even if their industries are allowed to operate.
The third-quarter GDP brought the country’s January to September average to 9.7 percent contraction, well above the government’s target of minus 4.5 percent to minus 6.6 percent.
Despite the double-digit decline, Chua said that “the economic team is optimistic that the worst is over for the country,” noting the country can return to a solid growth and development trajectory if it enables the economy to recover by efficiently managing risks.
“Our experience with COVID-19 over the past several months tells us two things. First, the economy is strong enough to recover, if we enable it to do so. Second, our best recourse to help the economy is to manage risks,” Chua said.
“Managing risks, instead of totally avoiding them, will allow us to safely open more of the economy and help Filipinos recover their sources of income. This will also put the Philippines back on its solid growth and development trajectory,” he added.
“The smaller GDP contraction of 11.5 percent in the third quarter from a contraction of 16.9 percent in the second quarter indicates that the Philippine economy is on the mend. The path is clearer to a strong bounce-back in 2021,” he added.
The economy has begun to recover, Chua said, citing that on a quarter-on-quarter basis, the GDP grew by 8 percent in the third quarter, reflecting the return of economic activities as the quarantine was eased.