PH’s economic slump eases to 4.2% in Q1

Socioeconomic Planning Secretay Karl Kendrick Chua said the modest decline provides hope that the economy will bounce back soon.

“We saw quarter-on-quarter growth although it is not very high. These are improvements that will support our recovery towards our growth trajectory or target of 6.5-7.5 percent… Next quarter, I believe there is a strong reason to see even better or even positive growth,” Chua said in a virtual press briefing.

Chua said growths of exports and manufacturing have created a net of 2.8 million jobs, indicating a direction of an improvement in the economy.

He is optimistic about economic recovery, citing the difference in the implementation of enhanced community quarantine (ECQ) and modified enhanced community quarantine (MECQ) in 2021 compared to last year.

Chua said 75 percent of the economy was shut down last year, there was no public transportation, and few sectors under Category 1 were allowed to operate.

“In this year’s ECQ, we allowed almost all (business establishments or activities) in categories I, II, and III to operate subject to some capacity restrictions. We allowed public transport to operate subject to the 50-percent rule or one seat apart. We allowed workers to go out and be exempted from the curfew so these are some examples of why we think this year’s ECQ or MECQ impact on the first and second quarter are much more muted,” he added.

Chua said while they have seen some losses in the imposition of quarantine measures, the country has still eight months to catch up and recover.

Chua, chief of the National Economic and Development Authority (NEDA), said this growth prospect is underpinned by three important policy actions which include safe reopening of the economy, full implementation of the recovery package, and acceleration of the vaccine program.

“Our projection for this year has assumed that the vaccine actually will begin to ramp up in the middle of the year so we are actually on track. We expect some 27 million doses to come from now until July,” he said.

Chua said a recovery package supporting the safe reopening of the economy comprises the Bayanihan to Recover as One Act (Bayanihan 2), the 2020 budget, the 2021 budget, the Corporate Recovery and Tax Incentives for Enterprises (CREATE) law that provides tax deductions to businesses of all sizes and targeted incentives to investors, the Financial Institutions’ Strategic Transfer (FIST) Act on addressing liquidity problems on firms, and the Government Financial Institutions’ Unified Initiatives to Distressed Enterprises for Economic Recovery (GUIDE) bill on addressing solvency problems on firms. (PNA)

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