Economy starts to pick up


    Business activities have started to pick up even as quarantine measures intended to curb the spread of the coronavirus disease 2019 (COVID-19), albeit eased, remain in place.

    This was learned by the Department of Finance (DOF) from industry leaders.

    The DOF said in a statement yesterday the economy is starting to recover after activities went on a standstill in the second quarter of this year triggered by the 11-week Luzon-wide enhanced community quarantine (ECQ).

    The DOF said in meetings held during the third week of July with industry leaders, the economic cluster sought the private sector’s feedback on the status of business operations and for advice on how the government could help restore consumer confidence.

    The private sector leaders reported construction has resumed, with one major property builder slowly restarting 78 projects and another conglomerate reporting its infrastructure investments largely remain on track, the DOF said.

    The DOF said mall owners in areas under the relatively relaxed general community quarantine (GCQ) and modified GCQ reported foot traffic returning to 24 to 30 percent compared to regular operations, but with sales still sluggish as of June. Mall purchases were mostly food, household items and gadgets.

    The National Capital Region and nearby provinces Laguna, Cavite, Bulacan and Rizal have been under GCQ since June 1. To boost the capacity of the healthcare system amid rising COVID-19 cases, President Duterte reverted these areas to modified ECQ (MECQ) from August 4 to 18.

    In June, the DOF said real estate businesses reported an increase in the sale of residential units of up to 60 percent.

    “Land developers report business process outsourcing companies have asked for additional office space for their employees, in compliance with physical distancing plus other health and safety protocols,” the DOF said.

    The telecommunications, water and energy sectors, meanwhile, expect positive sales growth this year despite the pandemic, the DOF said.

    The DOF added most firms reported they have begun seeing gradual sales recovery in June, coinciding with the partial reopening of the economy under GCQ, and expect a slow reduction of losses in the coming months, after the end of the MECQ on August 18.

    “A major private sector lender reported a rise in consumer loans except for automobile loans, and a surge in loan demand mostly from large firms,” the DOF said.

    “One major fast food chain has reopened 93 percent of its stores nationwide, but sales have remained below normal because of existing mobility restrictions,” it added.

    Meanwhile, the DOF said port operations have reached 60 percent utilization rate as of June.

    Liquor sales have also increased by up to 34 percent in the first half despite the lockdown and higher excise taxes imposed starting January this year under the new “sin” tax reform law.

    The DOF private sector leaders asked government to ease transportation restrictions, subject to health and safety protocols, to allow the movement of more workers and consumers.

    The fourth quarter is a crucial period to shore up demand and consumer confidence, they added.