A deeper contraction of 6% of GDP is observed

The economic director of the Duterte administration said yesterday that the country’s economy could contract more than expected this year due to a series of lockdowns imposed to contain the spread of the coronavirus.

Finance Secretary Carlos G. Domínguez III said the local economy, measured by gross domestic product (GDP), is projected to contract 6.0 percent this year, a steeper contraction compared to an estimate. 5.5 percent above.

“For the entire year, we project that our economy will contract about 6 percent,” Domínguez said during a virtual Economic Forum yesterday.

The finance chief attributed the sharp drop in locks that restricted movements within the economy and resulted in job losses.

“We have seen a spike in unemployment when the national economy was hampered by the shutdown. Our companies have endured the worst part of the economic recession, ”said Domínguez.

When asked if the Interinstitutional Committee for the Coordination of the Development Budget will review its GDP forecast for the year, Domínguez said it is “under discussion.”

But Domínguez said he expects the economy to recover as mobility restrictions are further eased and additional economic reform measures are implemented to save businesses affected by the pandemic.

He also said the government will increase its infrastructure spending under “Build, Build, Build” and hopes that Congress will pass the 2021 national budget on time.

“Next year, we expect the Philippine economy to rebound strongly. The challenges are great, but we are determined to rebuild a better economy that the Filipino people deserve, ”said Domínguez.

He said the Duterte administration has been doing everything possible to balance its efforts to revive consumer confidence and further reopen the economy with the implementation of health interventions to contain infections.

“The Duterte administration’s goal is to pursue a safe new normal while striving for a better normal. We cannot lock ourselves in completely 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 better figures in terms of the unemployment rate, which fell to 10 percent in July from 17.7 percent in April, when there were still strict lockdowns to prevent further spread. of the coronavirus.

Manufacturing has also slowed its contraction after the economy gradually reopened, it said, while revenue collection from the Internal Revenue Office and Customs Office exceeded revised targets by 8 percent in the first nine. months of the year.

Domínguez expressed confidence that the nation can “survive” the COVID-19 emergency, as the government has been consistently exercising prudence in managing its fiscal affairs.