MANILA, Philippine — The economic team is moving to arrest the impact of the COVID-19 pandemic and the resulting lockdown across the country in order to avert slow recovery and massive job losses, the Duterte administration’s chief economic manager said.
“We are now determining the damage to the economy so we can devise a workable plan to repair it, as well as estimate the funds required and avenues to finance such plan,” Finance Secretary Carlos G. Dominguez III said.
“We most likely will boost our infrastructure spending as it will create jobs, stimulate demand and provide enhancement of connectivity,” Dominguez said, adding that “the robust fiscal position we built up will serve as well.”
Dominguez said he believed that the private sector “will respond to these initiatives with speed and enthusiasm.”
Last Friday, the Asian Development Bank (ADB) warned that the Philippines may undergo a “less desirable” U-shaped recovery if it will be slow in restoring economic activity other than consumption after COVID-19 was contained.
Based on the ADB’s latest COVID-19 economic impact assessment template as of March 28, the Philippine economy would likely slash $2.616 billion from its gross domestic product (GDP) of $330.91 billion as of 2018, and shed 360,000 jobs across five sectors under a scenario of shorter COVID-19 containment resulting into smaller demand shocks in consumption, investment and tourism.
The five industries affected by COVID-19 both in terms of output and employment included agriculture, mining and quarrying; business, trade, personal, and public services; hotel and restaurants and other personal services; light/heavy manufacturing, utilities, and construction; and transport services.
If the Philippines would undergo a longer containment period and experience larger demand shocks, ADB estimates showed GDP loss rising to $5.358 billion on top of 739,000 in job losses.
But in case that a “significant” outbreak happened in the Philippines, losses in GDP were estimated to range between $7.709 billion and $19.035 billion.
Employment would also take a bigger hit from the additional impact of a significant outbreak, with between 1.042 million and 2.571 million Filipinos seen jobless in its aftermath.
While this year would be challenging for the Philippine economy, the ADB said in its Asian Development Outlook (ADO) 2020 report that the country’s “expansionary government policies… should facilitate an upturn in 2021.”
For next year, the ADB expects the Philippines’ GDP growth to jump to the lower end of the government’s yearly 6.5-7.5 percent target until 2022.
“In 2021, a V-shape recovery is expected with growth reaching 6.5 percent, provided that the effects of the virus outbreak dissipate by June 2020,” the ADB said.
For the ADB, recovery will be achievable if the government sustained the gains in rolling out its ambitious infrastructure development program called “Build, Build, Build,” on top of strong rebound in private consumption and investment.
Separately, London-based Capital Economics last Friday said it expects the Philippines’ GDP to contract by 4 percent this year, but rebound next year with 13-percent growth.