AT the start of this year, the Bangko Sentral ng Pilipinas (BSP) set a Gross Domestic Product (GDP) growth target for the Philippines of 6.5 to 7.5 percent for the year 2020. The coronavirus (COVID-19) pandemic, however, has upset al l economic growth plans and expectations around the world, including the Philippines. The BSP has now lowered its GDP projection for the Philippines to 5 to 5.5 percent.
In an online membership meeting of the Management Association of the Philippines, Tully Moss of the Boston Consulting Group said the country should be able to avoid a recession if it gets the COVID-19 infections under control. He said the Philippines has opportunities for recovery in its trade relations with the US, which is highly resilient, as well as with recovering Asia.
One factor for the decline in national growth this year is the big drop in remittances from Overseas Filipino Workers (OFWs). SanJay Mathur, chief economist for Southeast Asia and India at ANZ Research, said remittances are likely to take a hit this year from the worldwide epidemic, as the countries in most of the world’s major geographical areas have been hit hard by COVID-19.
The domestic economy has been severely affected by the enhanced community quarantine (ECQ) which locked down Metro Manila and the rest of Luzon, resulting in the closing of the operations of so many business enterprises.
Economic Planning Secretary Ernesto Pernia said Thursday that the lockdown may reduce economic growth this year to between zero and negative 1 percent, as he urged partial lifting of the ECQ to allow more businesses to resume operations The very next day, Friday, the administration announced Pernia’s resignation over disagreements with other economic officials of the government. This could be an indication of the action the administration is likely to take when the six-week ECQ ends on April 30.
There is indeed so much uncertainty in our world today, including our national economy, specifically our Gross Domestic Product. Our economic officials will continue to speculate but these coming months are so uncertain, it is difficult to come up with specific figures as in the past.
For the present, it might be best to concentrate on simply looking after the needs of the most vulnerable among us, while we strive to end the COVID infections. We will accept whatever GDP emerges at the end of the year.
