Finance Secretary Carlos Dominguez said the economy is projected to shrink by six percent this year which he attributed to the “the lockdown in August.”
“The pandemic and the measures to save lives and protect our communities from COVID-19 (new coronavirus disease 2019) have been very costly to the economy,” Carlos Dominguez, Department of Finance (DOF) secretary, said at the Manila Times Online Business Forum yesterday.
Metro Manila, Bulacan, Rizal, Cavite and Laguna were placed on modified enhanced community quarantine in August 4 to 18, from the more relaxed general community quarantine status, to boost the capacity of the healthcare system amid rising COVID-19 cases at the time.
Dominguez’ forecast is sharper than the 5.5 percent decline projected by the Development Budget Coordination Committee (DBCC) last July.
Last month, Karl Kendrick Chua, National Economic and Development Authority acting secretary, said during the DBCC’s virtual briefing before the Senate finance committee that the country’s gross domestic product (GDP) growth rate for 2020 is projected to be around negative 5.5 percent, or a contraction with a band of -4.5 percent to -6.6 percent.
Dominguez said government is bent on building back a better, post-coronavirus economy in 2021 as it sees a “strong rebound” from the pandemic despite the strong headwinds facing the country and the rest of the world this year.
He expects the domestic economy to bounce back as mobility restrictions are further eased, the Bayanihan 2 law and the additional economic reform measures are rolled out to save pandemic-hit businesses, high infrastructure spending under “Build, Build, Build” is sustained and once the 2021 national budget is passed on time by the congress.
“Next year, we expect the Philippine economy to post a strong rebound. The challenges are large, but we are determined to build back a better economy that the Filipino people deserve,” Dominguez said.
The DOF said the calibrated easing of mobility restrictions has led to improved numbers in terms of the unemployment rate which dropped to 10 percent in July from 17.7 percent in April, when strict lockdowns were still in place to prevent the further spread of the coronavirus.
Manufacturing has also slowed down its contraction after the economy was gradually reopened, Dominguez said, while revenue collections by the Bureaus of Internal Revenue and of Customs exceeded revised targets by eight percent in the first nine months of the year.
Dominguez expressed confidence that the nation can “outlast” the COVID-19 emergency as the government has been consistently exercising prudence in managing its fiscal affairs.