The Philippines faces recession after coronavirus pandemic continuously bombards the economy. According to the Philippine Statistics Authority (PSA), the recession was the first in 22 years.
In its Q1 report, the GDP shrank to 0.2%, the first decline since Q4 in 1998. This decline interrupted two decades of uninterrupted growth.
The strict quarantine and lockdown measures implemented by Duterte Regime has struck back to the country’s economy. The concentration of lockdown takes place in Luzon, which accounts for the country’s most economic activities.
The economic contraction eliminated forecasts for 3.1% growth in the first quarter this year. Additionally, economists believe that the economy would fall even deeper in the following quarter(s).
“Containing the spread of the virus and saving hundreds of thousands of lives through the imposition of ECQ has come at a great cost to the Philippine economy,” Acting Economic Planning Secretary Karl Chua explained.
Also Read: The Philippine Peso Slips on Negative GDP Report
How the Philippines Faces its Recession
The recession indubitably shocked the whole country as, in 20 years, Manila arguably has continually positive economic growth. Although, by convention, the country needs a two-month consecutive negative growth to declare recession, the current situation suggests that it already entered the phase.
The government believes that the eruption of Taal Volcano in mid-January was responsible for the economic decline. However, many economists would argue that the COVID-19 lockdown is the biggest contributor to the downfall.
The implementation of lockdown and social distancing has forced various industrial sectors into hibernation. The sudden measure immediately takes tolls in the country’s economy.
In order to support growth, the Bangko Sentral ng Pilipinas (BSP) has cut interest rates three times in 2020. BSP Governor Benjamin Diokno predicted that the economy would bounce back in Q4. The assumption is based on the capability to contain the pandemic in the second half.
Also Read: Philippines: Duterte May Restart Economy after Lockdown
