Philippine economy nosedives into recession

Thursday, August 6th, 2020. Filed under: Money & Business News

MANILA, Aug 6 (Mabuhay) — The Philippine economy plunged further in the second quarter to mark its worst performance on record, bringing the country to a technical recession amid the COVID-19 pandemic.

In a virtual briefing on Thursday, the Philippine Statistics Authority (PSA) said the economy contracted by 16.5% during the April to June period.

This follows with the downward-revised -0.7% in the first quarter of the year, and 5.5% in the second quarter of 2019.

Bangko Sentral ng Pilipinas (BSP) Governor Benjamin Diokno earlier said two consecutive quarters of contractions would qualify as a technical recession.

A recession means that a country posted two consecutive quarters of negative GDP. A “technical recession,” on the other hand, is defined as two consecutive quarters of negative GDP but is mainly caused by an isolated event – in this case a pandemic – rather than an underlying economic problem.

National Statistician Claire Dennis Mapa said that the two consecutive quarters of economic contraction this year is the “first time since 1991.”

The Philippine economy was in a standstill during the latter part of the first quarter due to the implementation of strict quarantine measures — enhanced community quarantine (ECQ) in Metro Manila and other high-risk areas from March 17 to May 15, followed by a modified enhanced community quarantine (MECQ) until May 31.

Looser restrictions were then implemented under the general community quarantine (GCQ) starting June 1. Metro Manila and four other nearby provinces, however, were reverted to the stricter MECQ on August 4 and will last until August 18. (MNS)

ALSO READ: Philippine economic managers expecting deeper economic slump of -5.5% for 2020

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