THERE was one depressing story about the Philippine economy early this week – the country suffered its worst economic contraction on record in 2020 – by 9.5 percent – due to the COVID-19 pandemic, the National and Economic Development Authority (NEDA) and the Philippine Statistics Authority (PSA) disclosed.
On the same day, however, the international credit-rating agency – S&P Global Ratings, based in the United States – said the Philippine economy may emerge as one of the fastest-growing economies in the region and rebound with a growth of 9.6 percent this year and 7.6 percent next year.
The year 2020 was a dismal one for the Philippine economy – as it was for all other economies in the world. The country’s economic contraction was the worst since the government started collecting data for the annual GDP in 1946.
The national economy start plummeting when the county started its economic restrictions in March, 2020, as the COVID-19 virus started spreading around the world after it emerged in China in December, 2019. That March, the national economy came to a halt as industries and businesses of all kinds closed down and people were told to stay home to keep the virus from spreading.
The economy shrank by 16.9 percent in the second quarter of April-May-June, as the country entered its strictest levels of community quarantine. Some businesses started reopening in the fourth quarter of October-November-December. The NEDA has now determined that for the entire year of 2020, the national economy had shrunk 9.5 percent.
Balancing this depressing bit of news this week was the assessment of S&P Global Ratings that the Philippines should rebound strongly in 2021 with a growth of 9.6 percent this year, second only to Vietnam’s 10.9 percent, but ahead of Malaysia’s 7.5 percent, Singapore’s 6 percent, and Thailand’s 5 percent.
By 2022, the S&P said, the Philippines may post the region’s top GDP growth, higher than Vietnam’s 6.8 percent, Indonesia’s and Malaysia’s 5.2 percent, Thailand’s 3.9 percent, Singapore’s 3 percent, and Taiwan’s 2.5 percent.
The S&P said the pandemic remains the key risk factor facing the Asia-Pacific in the next months. But the outlook among the Asia-Pacific nations is generally stable
COVID-19 remains a big threat in many parts of the globe, but we in Southeast Asia have been able to do much better against the virus. We continue to keep our guard up with restrictions designed to keep infections down. Metro Manila has just been retained by Malacañang under General Community Quarantine for the coming month of February.
With a few exceptions, we have learned to live with the COVID-19 virus. A few restrictions remain, but in general, the Philippines is facing the new year with great hopes and expectations.
With Vietnam, we might even lead Southeast Asia – as predicted by S&P Global – in its economic recovery this year and in 2022.
