During the first quarter, the Philippine economy contracted for the first time in more than two decades. But, officials cautioned Thursday that the worst was possibly yet to come as the nation reels from the coronavirus pandemic.
In January-March, the gross domestic product shrank 0.2 percent, its worst performance since 1998 during the Asian financial crisis as the Philippines joins a long line of countries to announce disastrous statistics as a result of widespread lockdowns that have shut down economies.
“Containing the spread of the virus and saving hundreds of thousands of lives, although the imposition of the (quarantine) has come at great cost to the Philippine economy,” said Acting Secretary for Economic Planning Karl Chua.
Also taking a toll was the January eruption of the Taal volcano. Hence, it forced the temporary closure of Manila’s main international airport.
There will be More Suffering in the Second Quarter
Chua said there would be more suffering in the second quarter. And also, the economy could contract further. “I think the first quarter is quite respectable, despite the very tough world in which we find ourselves. Could be worse for the second quarter, “he said.
Consumer spending growth, as the key economic driver of the Philippines, slowed down to just 0.2 per cent over the period. The closure hits of malls and shopping centers in lockdown areas. Since mid-March, many areas in the Philippines have been under quarantine. In addition, it will remain so until at least mid-May to prevent the spread of the virus. The place goes for Manila and nearby areas where most economic activity is taking place.
But Chua added in its statement. “With the progress we are seeing on the health side, there is a very strong possibility that we will have a successful recovery.”
The country could bounce back in the second half of the year as it slowly reopened businesses. More than 10,000 cases of coronavirus have been identified in the Philippines and more than 600 people have died.