The growth momentum stalled in the first quarter with the economy contracting for the first time in more than two decades as the gross domestic product shrank 0.2 percent in the first three months, government statistics released yesterday showed.
Economic officials warned that the worst was likely yet to come as the nation reels from the coronavirus disease 2019 pandemic.
The negative performance was the worst since 1998 during the Asian financial crisis as the Philippines joins a long line of countries to report devastating figures as a result of widespread lockdowns that have shut down economies.
National Statistician Claire Dennis Mapa said that the 0.2 percent contraction was the first decline since the minus 3 percent GDP recorded in the fourth quarter of 1998.
Acting Socioeconomic Planning Secretary Karl Kendrick Chua said that while the GDP outturn was unexpected, such pace remains modest compared to other countries.
“If I compare this to 2009 and 1998, the magnitude of the impact, suggests this small decline is actually respectable. Compared to other countries, we are in a better footing,” Chua said.
June recovery tipped
Presidential spokesman Harry Roque said the poor first quarter figure was regrettable “but we’re glad it’s a minimal contraction given that the enhanced community quarantine (ECQ) was imposed in the first week of March.”
“We have very sound economic fundamentals as evidenced by good credit rating and a strong peso despite the ECQ. We expect the economy to shrink even more during the month of April,” according to Roque.
Chua, hoiwever, expects a June turnaround for the economy and “by the end of the year, we will have a respectable performance.”
According to him, such decline in the first quarter period could be owed to “three shocks of increasing magnitude,” the eruption of Taal volcano, the coronavirus disease (COVID-19) pandemic and the sharp drop in trade and tourism for February and March.
For the full year 2020, the Cabinet official said that the government will stick with the Development Budget Coordination Committee’s latest preliminary projection of 0 to -0.8 percent growth and revision for such will come depending on future sets of data.