The Philippines Statistics Authority has released reports that indicate the country has faced its worst rate of economic growth in almost three decades. The gross domestic product (GDP) of the country has decreased by over 15 percent this year (16.5%) according to the June 2020 report of the Authority. The losses have accumulated up to trillions in Philippine pesos, and the cause of this has been directed towards the strict lockdown procedures taken in the country. The strict procedures were due to plans on stopping the spread of the pandemic, and this has led to an overall very poor economic growth in the country.
The situation is made worse by the report from the Department of Labor and Employment, which indicated that over 2 thousand companies have been closed from the accumulated losses. This had led to thousands of workers unemployed. Economists such as Prof. Ronald U. Mendoza, dean of Ateneo de Manila University’s School of Government, has attributed this economic recession in the country to the shutdown of the Philippines’ largest entertainment and media conglomerate ABS-CBN which had over 11,000 workers across the country. Other reasons he had stated on social media include the passage of the debated Anti-Terrorism Act of 2020(Madarang, 2020).
The problems exacerbate for the citizens in the Philippines because of the heavy reduction of remittances from their family members working abroad, and coupled with the high numbers of newly unemployed people, is making maintaining daily expenses difficult for families in the country. The policymakers are proposing to provide some monetary support through a corporate tax cut, but the proposed overall amount seems to be much lower than what other countries are providing to their own citizens.
The weakening of the country’s economy has been consistent since the fiscal year of 2019, and this has been backed up by the low public spending. The consistent economy the country has been able to maintain is beginning to suffer during the pandemic. The government has been able to take successful measures to combat inflation, but the overall picture of the economy in the current environment of international trade has resulted in the situation we are observing at present(The World Bank, 2019)(Al Jazeera, 2020).
The government of the Philippines has declared its intentions of attending to the ongoing crises the country and its citizens are facing in the pandemic. How effective these measures will be in the short and long run, still remain to be seen. Significant improvements in economic growth are still absent, and the steps the government has taken to enforce security and more effective control has not helped based on the available information from news sources and reports. Disbanding companies for robust economic growth might backfire significantly if new outlets are not quickly facilitated for citizens. With reduced support from family members abroad, citizens might start becoming desperate, and the government’s strict lockdown might backfire if this continues.
Al Jazeera. (2020, August 6). Philippine economy posts its biggest-ever quarterly plunge. Retrieved November 2020, from Al Jazeera: https://www.aljazeera.com/economy/2020/8/6/philippine-economy-posts-its-biggest-ever-quarterly-plunge
Madarang, C. R. (2020, August 6). What you need to know about the Philippines’ economic growth as it sinks into recession. Retrieved November 2020, from Interaksyon: https://interaksyon.philstar.com/politics-issues/2020/08/06/174502/what-you-need-to-know-about-the-philippines-economic-growth-as-it-sinks-into-recession/
The World Bank. (2019, October 10). Philippines Economic Update October 2019. Retrieved November 2020, from The World Bank: https://www.worldbank.org/en/country/philippines/publication/philippines-economic-update-october-2019-edition