PH shows a sustained economic recovery – DOF

The partial recovery of the country’s merchandise trade reflected the gradual and calibrated reopening of the economy after the strict lockdowns in the second quarter, said the Department of Finance (DOF).

In an economic bulletin, Finance Undersecretary Gil S. Beltrán said the contraction in merchandise trade continued to slow from its deepest level of -59.5 percent in April to -18.6 percent in July this year.

Beltrán pointed out that merchandise trade partially recovered in the following months from the lower negative growth in April, with -35.3 percent in May and -18.7 percent in June.

Acting Secretary for Socio-Economic Planning Karl Kendrick T. Chua said the government must maintain the gradual and calibrated opening of the economy while ensuring strict adherence to health and safety standards to support economic recovery.

Aside from merchandise trade, Beltran, who is also the DOF’s chief economist, also noted that the Philippines Purchasing Managers Index (PMI) reached its highest reading since February at 50.1 percent last month.

The PMI is an economic indicator derived from monthly surveys of private companies. An index reading above 50 indicates that the economy is growing overall, while below 50 a general contraction.

“Good macroeconomic fundamentals have cushioned the impact of the coronavirus pandemic. A prudent and calibrated reopening of key sectors of the economy will be key to the recovery of the economy in general and of commerce in particular, ”said Beltrán.

The finance official, meanwhile, said the government should continue with fundamental structural reforms by passing key legislative proposals from the Duterte administration.

These measures supported by the DOF are the Law on Corporate Recovery and Tax Incentives for Companies (CREATE), the draft Law on Strategic Transfer of Financial Institutions (FIST) and the Law on Passive Income Taxes and Financial Intermediaries (PIFITA).

Beltrán also pushed for amendments to the Commonwealthera Public Service Act and the Retail Trade Liberalization Act. “Looking ahead, the Philippines should adopt economic reforms, in addition to its infrastructure program, to attract more investment,” Beltrán said.

“These measures can help the country resist and recover from the impacts of the coronavirus pandemic.”

“Additionally, improvements in the ease of doing business will also be important in adapting to the new normal,” he added.