The Department of Finance said business activities started to pick up from the economic standstill in the second quarter when the gross domestic product contracted by 16.5 percent from a year ago.
It said the gradual and phased recovery was under way despite the continued mobility restrictions designed to curb the spread of COVID-19.
Finance Secretary Carlos III and other economic managers sought the private sector’s feedback on the status of business operations and for advice on how the government could help restore consumer confidence in a series of meetings held in the third week of July.
The private sector leaders reported that construction had resumed, with one major property builder slowly restarting 78 projects and another conglomerate reporting that their infrastructure investments remained on track.
Mall owners in areas under the relatively relaxed general community quarantine and modified GCQ reported that foot traffic returned to 24 percent 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 the nearby provinces of Laguna, Cavite, Bulacan and Rizal have been under GCQ since June 1. To further boost the capacity of the healthcare system amid rising COVID-19 cases, President Rodrigo Duterte placed these areas back to modified ECQ starting midnight of Aug. 4 up to Aug. 18.
Real estate businesses reported an increase in the sale of residential units of up to 60 percent in June. Land developers reported that business process outsourcing companies asked for additional office space for their employees, in compliance with physical distancing and other health and safety protocols.
The telecommunications, water and energy sectors expect positive sales growth this year despite the pandemic.
Most companies reported that started to see a gradual sales recovery in June, coinciding with the partial reopening of the economy under GCQ and were expecting a slow reduction of losses in the coming months, after the end of the MECQ on Aug. 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.
Hotel operations resumed in both GCQ and MGCQ areas but only for a limited number of bookings, such as for long-staying guests, returning overseas Filipinos and stranded passengers.
One major fast food chain reopened 93 percent of its stores nationwide, but sales remained below normal because of existing mobility restrictions.
Port operations, meanwhile, reached 60-percent utilization rate as of June.
Liquor sales increased by up to 34 percent in the first half of 2020 despite the lockdown and higher excise taxes imposed starting January this year under the new "sin" tax reform law.
Among the recommendations from private sector leaders were the easing of 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 said.
Dominguez confirmed these findings during the July 31 meeting of the Inter-Agency Task Force for the Management of Emerging Infectious Diseases with President Rodrigo Duterte.
“The economy actually is already beginning to recover. Our estimate is that we hit already the lowest parts of the economy which was in April and May. These were the lowest points,” Dominguez said during the televised portions of the meeting.
“We have to encourage people also to start spending so that the economy can start picking up,” he said.
Economic managers and health officials repeatedly underscored that strict compliance with health and safety measures, such as wearing of masks, frequent hand washing and social distancing, would greatly reduce the risk of infection.
Dominguez said the Philippines’ low inflation rate, ample liquidity in the economy and stable peso placed the country “in good shape to overcome the COVID-19 crisis.”
First Metro Investment Corp. president Jose Patricio Dumlao said the while economy could contract by 8 percent to 9 percent this year, it was strong enough to withstand the headwinds brought by the health crisis.
“We have gone through so many crises in the past and we have shown, time and again, our resilience as a country in overcoming the toughest of crises. The difference this time is that we are coming from a stronger position,” Dumlao said in a virtual mid-year economic briefing.
He said the country’s macroeconomic fundamentals were on solid ground, the banking industry well capitalized and the country’s debt-to-GDP ratio when it entered the pandemic was at a historic low of 39.6 percent, which would provide enough fiscal buffers.