"The government has no chance of improving the Filipinos’ lot if it allows the economy to deteriorate further."
The Philippine economy may be among the last in Asia to recover fully from the pandemic, judging from the slow pace of the vaccine rollout here and recent restrictions to curb the spread of COVID-19.
Bangko Sentral ng Pilipinas Governor Benjamin Diokno early this week conceded that the gross domestic product may grow slower than expected this year due to the prolonged impact of the coronavirus pandemic. The return of Metro Manila and nearby provinces to more restrictive quarantine rules has already guaranteed that.
The country’s economic managers will predictably lower their GDP growth forecast for 2021 from 6.5 percent to 7.5 percent to around 6 percent to 7 percent. The month-long curbs, including longer curfew hours, have restricted mobility, shut down many retail establishments and took away thousands of jobs in the capital region and the provinces of Cavite, Laguna, Rizal and Bulacan.
Some analysts have concluded that the Philippines will be among the last to recover in the Asia-Pacific region because of the deep scar caused by the health crisis. The economy will register growth starting in the second quarter of the year because of the low base effect. Returning to the 2019 pre-pandemic levels, however, will require massive fiscal spending to jump-start the economy,
Gov. Diokno is unfazed by the discourse of doomsayers, telling critics that the Philippines is not that bad. The pace of economic recovery, though, will depend on the speed of the vaccine rollout program and government’s move to provide jobs and livelihood to the affected population.
The GDP contracted by a record 9.6 percent in 2020 amid the pandemic. The economy entered into a technical recession as early as the second quarter of 2020 when the GDP sank 16.9 percent.
When an economy contracts, the labor sector suffers. Unemployment will rise, adding pressure to the government to provide assistance to those displaced by the pandemic. Worse, the poverty incidence will worsen.
Policymakers, thus, must assure the people that the economy will recover fast in order to create employment. The government has no chance of improving the Filipinos’ lot if it allows the economy to deteriorate further.