The economic team will set out to arrest the impact of the COVID-19 pandemic and the resulting lockdown across different parts of the country in order to avert slow recovery and massive job losses.
“We most likely will boost our infrastructure spending as it will create jobs, stimulate demand and provide enhancement of connectivity,” Finance Secretary Carlos Dominguez III 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.”
He said the country’s economic managers “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.”The Asian Development Bank (ADB) warned the Philippines on Friday it could see a “less desirable” U-shaped recovery if it failed to jump-start the economy after the pandemic was contained. This means the economy will face a sharp downturn followed by a slow rebound.
Based on the ADB’s latest COVID-19 economic impact assessment as of March 28, the Philippine economy would likely slash $2.616 billion off its gross domestic product (GDP) of $330.91 billion (based on 2018 data) and shed 360,000 jobs across five sectors under a scenario that the community spread is immediately contained.
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, restaurants and other personal services; light/heavy manufacturing, utilities and construction; and transport services.If the Philippines would need a longer period to resolve the crisis and would thus experience larger demand shocks, ADB estimates showed GDP losses could rise to $5.358 billion and job cuts of up to 739,000.
In case 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—between 1.042 million and 2.571 million Filipinos would find themselves jobless in the aftermath.
While this year would be challenging for the Philippine economy, the ADB said in its Asian Development Outlook 2020 report the country’s “expansionary government policies … should facilitate an upturn in 2021.”
For the next two years, the ADB expects the Philippines’ GDP growth to jump to the lower end of the government’s yearly 6.5-7.5 percent target.
“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 would be achievable if the government sustained the gains from its banner infrastructure program as well as a strong rebound in private consumption and investments. INQ