The country’s socioeconomic chief is hoping to see the economy return to a positive growth path in the first quarter of 2021, however, pointing out that what will happen this month, as more people gather for the holidays, will be a “make or break” for the Philippines’ economic performance.
The government projects that the economy will bounce back next year, from a contraction so far this year amid the coronavirus disease 2019 (COVID-19) pandemic.
The Philippine economy is projected to contract by 8.5 to 9.5 percent this year, based on the revised assumptions of the interagency Development Budget Coordination Committee.
The average gross domestic product (GDP) growth rate for the first three quarters so far is -10 percent.
GDP growth is projected to bounce back to reach 6.5 to 7.5 percent in 2021 and 8 to 10 percent in 2022.
“I’m hoping (to see positive growth) by the first quarter of 2021. It makes sense actually that the first quarter should begin to be positive in terms of the growth rate,” Karl Kendrick Chua, National Economic and Development Authority acting secretary, said in a virtual event yesterday.
“The main driver of that are two things. Number one is what we do in December, because December is the holiday season, our behavior may make or break our performance. What do I mean? If everyone continues to cooperate, maintain the health standards, then we can get through December and enter 2021 on a good footing, meaning the cases are managed, and we can further open the economy, and we will see the positive growth which I hope will happen,” he added.
However, Chua said if the COVID-19 cases rise in December because of “lack of adherence to minimum health standards,” it will be “hard” for 2021.
Meanwhile, Chua said the government is still keeping, and will achieve, its poverty rate target of 14 percent by 2022, even as the pandemic affected the livelihoods of many.
“Many people actually have seen their jobs and their income sources come back. And the reality here is the majority of the poor are in the rural areas in provinces and the provinces are in the lowest (quarantine) restrictions and their livelihoods continue,” Chua said.
“The main problem, I think, is in the urban areas, (the stricter quarantine level) and social distancing prevent many from going back to work. So I think our estimates of our poverty remain. We expect further progress in our recovery, and because Congress has passed several important recovery bills, (that will) actually help keep us in our target,” he added.