The Philippines is now in recession, the first time in nearly 30 years after the Philippine Statistics Authority reported Thursday that the second quarter gross domestic product (GDP) growth was at -16.5 percent.
“Gross domestic product declined by 16.5 percent in the second quarter of 2020. This is the lowest reported quarterly growth starting in the 1981 series,” National Statistician Claire Dennis Mapa said.
“The decline was partly because of the lockdown. You’re seeing drop in the sectors. We’re seeing that because of the April, May lockdown. That’s the data we’re receiving,” he added.
A Reuters poll of 13 economists predicts a range of -18 to -4.2 percent.
Meanwhile, household consumption dropped 15.5 percent, its “biggest in history.” The last dip was during the Marcos era in 1985 as reported by ABS-CBN Data Analytics.
Enchong Dee and Zsa Zsa Padilla shared the same sentiment towards the news.
For more depressing news… https://t.co/JrLnEkkECu
— zsa zsa padilla (@zsazsapadilla) August 6, 2020
Metro Manila makes up for a third of the gross domestic product while Calabarzon is filled with several economic zones and industrial plants.
Thanks to COVID-19, the first quarter GDP contracted for the first time since 1998. Data suggests that first-quarter GDP has been revised to -0.7 percent from -0.2 percent
“The Philippine economy crash landed into recession with the 2Q GDP meltdown showcasing the destructive impact of lockdowns on the consumption-dependent economy,” ING senior economist Nicholas Mapa said.
“With record-high unemployment expected to climb in the coming months we do not expect a quick turnaround in consumption behavior, all the more with COVID-19 cases still on the rise,” he added.
The Development Budget Coordination Committee, which handles the government’s macroeconomic goals and policies said that COVID-19 will cost the economy P2.2 trillion this year
Metro Manila, Cavite, Laguna, Rizal, and Bulacan will be under modified enhanced community quarantine (MECQ) from August 4 to 18 following the increase in confirmed cases.
Bangko Sentral ng Pilipinas Gov. Benjamin Diokno said that the reverting back to an MECQ will have “limited economic impact”. He added that OFWs have also lost their jobs and remittances could contract by as much as 5 percent this year.
The onset of the lockdown, which was early in March, left 7.3 million Filipinos jobless. The Department of Trade and Industry previously said that at least 30 percent of businesses have permanently or temporarily closed because of the pandemic.
The Asian Development Bank said remittances in 2020 could shrink by as much as 20.2 percent compared to 2018 numbers in a “worse case scenario.”