With a COVID-19 vaccine just around the corner, President Duterte’s chief economic manager on Tuesday said the Philippines was poised for a strong economic recovery next year from the pandemic-induced recession.
Finance Secretary Carlos Dominguez III pointed to recent green shoots of recovery —growth in cash remittances from overseas Filipinos last September, record-high dollar reserves, the Philippine peso stronger than the US dollar by 4.9 percent year-to-date and a residential housing market that he said was “holding up well.”
While consumer demand was still muted by fears of getting infected with COVID-19, Dominguez said in an interview with Bloomberg TV that the Philippine economy was on the “right track to see a better performance” before year’s end.
The Philippines’ gross domestic product shrank by 10 percent during the first nine months, even as the third-quarter GDP grew by 8 percent from the trough in the second quarter when three-fourths of the economy stopped at the height of the longest and most stringent COVID-19 lockdown in the region.
Dominguez said the possibility that an effective COVID-19 vaccine would be available by the first half of next year “should inject a lot of confidence back into our country.”
As such, “we do expect a big bounce back in GDP growth next year,” Dominguez said.
The economic team is reviewing its earlier projection of a GDP contraction of 4.5 to 6.6 percent in 2020 following the end-September turnout. It had projected a growth of 6.5-7.5 percent in 2021.
Dominguez said he was also optimistic of more Philippine exports to China as both Manila and Beijing formed part of the Regional Comprehensive Economic Partnership (RCEP), the world’s biggest free-trade deal.
The additional stimulus coming from the proposed P4.5-trillion 2021 national budget and pending measures to bring down corporate income tax rates as well as assist banks and small businesses would “put more money to the private sector and individuals,” Dominguez said.
Dominguez added that borrowings would be kept to the program amid an expected protracted battle against COVID-19.
The finance chief said they wanted to revert the unemployment rate to below 5 percent, or where it was prepandemic. The lockdown shed millions in jobs, resulting in record double-digit jobless rates during the second and third quarters.
Separately, the Manila-based Asian Development Bank (ADB) in a statement on Tuesday said it was making available $20.3 million in technical assistance to its developing member-countries, including the Philippines, for their respective vaccine distribution programs.
In particular, the ADB said its technical assistance facility, which was partly financed by the Japanese government, would support vaccine-related health system assessments and the development of country readiness plans to strengthen the capacity to access, introduce, deploy, deliver, and monitor vaccines safely and effectively.