Flat growth or 0.8% GDP contraction seen in 2020
The Duterte administration’s chief economic manager on Wednesday said the extension of the enhanced community quarantine in Luzon would result in “zero to possibly negative 0.8-percent” growth in 2020.“Definitely businesses are impacted, especially businesses in the tourism sector as well as retail sector. Our tax collections are definitely going to be a bit lower than our original target,” Finance Secretary Carlos Dominguez III said in a television interview with CNBC.
Department of Finance (DOF) estimates had shown forgone revenues to reach P286.4 billion if gross domestic product (GDP) posted zero growth this year, or a bigger P318.9 billion if GDP contracted by 1 percent.
For the economy to immediately rebound postpandemic, Dominguez said the economic team was crafting a “bounce-back” plan while currently assessing the economic damage caused by COVID-19.
“We’ve done surveys, and so far we have 40,000 respondents. After we determine the economic damage, we will then determine what is required by sector—such as the tourism sector, the manufacturing sector, etc.; by the size of the companies—the small and medium enterprises, the big companies, and what is also needed by consumers and banks,” Dominguez said.
Over the weekend, the DOF and the state planning agency National Economic and Development Authority rolled out surveys for consumers, micro, small and medium-sized enterprises as well as businesses in the agriculture and fisheries sectors to better prepare for a so-called new normal once the coronavirus pandemic had been contained.
Dominguez said the economic team would be putting together a comprehensive package to quickly rebound from the socioeconomic fallout caused by the new virus.
In a statement on Wednesday, the UN Economic and Social Commission for Asia and the Pacific (Unescap) said that the pandemic was “having far-reaching economic and social consequences for the Asia-Pacific region, with strong cross-border spillover effects through trade, tourism and financial linkages.”
Unescap’s Economic and Social Survey of Asia and the Pacific 2020 report released also on Wednesday showed that the coronavirus was “the immediate risk to the region’s economic outlook, deepening the economic slowdown that was already underway.”
Although there are significant uncertainties surrounding the pandemic, the negative impacts are likely to be substantial, Unescap said.
“As the COVID-19 pandemic is still evolving rapidly and showing no signs of abating as of March 31, its negative impacts on economic performance of countries and territories in Asia and the Pacific will likely be very significant,” according to Unescap.
As governments respond to the crisis and introduce stimulus packages, the report estimates that Asia-Pacific developing countries should increase health emergency spending by $880 million per year. —Ben O. de Vera
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