The Philippine economy joins the rest of the world in plunging into recession, as the economy shrank by 16.5% in the 2nd quarter of 2020.
The contraction of the country’s gross domestic product (GDP) in the 2nd quarter is the sharpest drop ever on record, said the Philippine Statistics Authority on Thursday, August 6.
The main contributors to the decline were:
Among the major economic sectors, only agriculture, forestry, and fishing increased with 1.6% growth.
Industry and services both decreased during the period by 22.9% and 15.8%, respectively.
Household consumption and expenditure also fell by 15.5%.
Exports and imports fell by 37% and 40%, respectively.
Government final consumption expenditure posted positive growth of 22.1%.
"Without doubt, the pandemic and its adverse economic impact are testing the economy like never before. But unlike past crises, the Philippines is now in a much stronger position to address the crisis," Acting Socioeconomic Planning Secretary Karl Chua said.
For the entire 2020, the government's economic team sees the economy contracting by 5.5%, deeper than the 2% to 3.4% contraction earlier projected.
Chua said the new projection takes into account the stricter lockdown now in effect in Metro Manila and nearby provinces for two weeks.
To recover from the slump, the economic team is backing the Senate's proposed Bayanihan 2 law, as well as a revised infrastructure program, which would pour billions of pesos into health projects.
Expenses amid lower government revenues pushed President Rodrigo Duterte to borrow more from multilateral lenders to bridge the budget gap. (READ: Duterte's loans for coronavirus and why PH might need more)