Palace concerned as economy plunges into recession

Friday, August 7th, 2020. Filed under: Money & Business News Philippine News

MANILA, Aug 7 (Mabuhay)– Malacañang on Thursday expressed concern over the state of the economy which slipped into a recession for the first time in nearly three decades.

The economy shrank by a record 16.5% in the April to June period when lockdowns meant to prevent the spread of COVID-19 shut down around 75% of the economy, according to the government.

The last time the Philippines suffered two consecutive quarters of economic contraction was in 1991.

“We are concerned by the steep drop which is much worse than what our government economists had expected,” presidential spokesperson Harry Roque said.

“The Philippines, we underscore, is not the only nation facing this economic situation. COVID-19 has had an adverse economic impact on countries like Singapore, Indonesia, the United States, France, Spain, and Mexico.”

While the government took the “painful choice” of imposing strict lockdowns, Roque said the administration rolled out an emergency subsidy program for millions of low-income households and workers of small businesses.

“Although our lockdown and community quarantine implementation had an impact on our economic performance, it served as a cushion to our society’s general health, protection, and well-being against COVID-19,” Presidential Communications Operations Office Secretary Martin Andanar added.

“Furthermore, it served as a safety net to suppress the collapse of our healthcare system and assist our frontline healthcare workers, who have been tirelessly responding to the pandemic since it began.”

Moving forward, the Palace said the government’s economic managers have crafted an economic recovery program to fight the pandemic’s effects on business and livelihood.

“We have likewise recalibrated our budget for next year and restarted our Build, Build, Build programs, subject to health and safety protocols, to create jobs,” Roque said.

Roque also reiterated the call of President Rodrigo Duterte for Congress to pass the proposed Bayanihan to Recover as One Act, which provides an economic relief package, and the proposed Corporate Recovery and Tax Incentives for Enterprises Act.

“Our resolve to recover at the soonest possible [time], however, remains strong,” Roque said. “We assure everyone that the government will continue working round the clock to strengthen our resilience and bring us back to the path of inclusive growth.”

The economic managers are expecting the economy to contract by 5.5% this year, taking into consideration the updated indicators on the impact of the pandemic on tourism, trade, and remittances. (MNS)

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