Despite it not being the sole solution to a weakening economy, Vice President Leni Robredo underscored the importance of the government’s vaccination roll-out in stopping the country’s economy from shrinking further.
An Economics graduate from the University of the Philippines, Robredo sounded the alarm in her Facebook page after the gross domestic product contracted by 8.3% in the fourth quarter of 2020.
She said this “is worse than the forecasted -7.9%.” Robredo added that this figure brought the 2020 full-year contraction to -9.5%, which was the worst since the post-World War II period in 1946.
“Comparative figures with our Asian neighbors indicate it will take us a much longer time to recover. Household consumption and demand is still down. In a consumption economy like ours, this is bad news,” she added.
Robredo said “other services” were the highest contributor to the decline at 45.2%. This is followed by the -42.7% drop in accommodations and food service activities and the -25.3% decline in construction.
Although the agriculture sector posted positive growth in the second and third quarter last year, the vice president noted that it registered a -2.5% growth in the last quarter.
“We’re hoping to perform better in 2021. It is crucial that we do not bungle our vaccination roll out. The number of new cases is still in the thousands each day and an effective vaccination plan will be a game changer. It is not the be-all and end-all but it will definitely increase overall confidence,” Robredo said.
The Philippine Statistic Authority had earlier said that the 9.5% decrease in GDP was not only the worst since 1946, but it was also the lowest recorded since the country started tracking GDP in the same year.
The last time the economy contracted was during the 1998 Asian financial crisis when it posted a 0.5% reduction. During the end of the Marcos dictatorship, the country’s GDP recorded -7% growth, making the 2020 contraction far worse in comparison.
Officially, the country’s economy entered into a recession in the second quarter of last year when the GDP contracted by 16.5% because of the lockdown restrictions that halted economic activities in all sectors.
The country has yet to start its vaccination program, although officials said that the first tranche of coronavirus vaccines will arrive in February.