“Signs” show Philippine economy recovering, says Dominguez

July 8, 2020

Finance Secretary Carlos Dominguez said on Wednesday that there are "signs" that the economy is starting to recover after a lockdown to prevent the spread of coronavirus disease.

In the virtual pre-SONA (State of the Nation Address) briefing, Department of Finance chief said that recovery could be seen on increased collection, trade and manufacturing, among others.

"Signs of recovery are emerging," he said.

Despite the effects of COVID-19 on the overall trading environment, he cited that the Bureau of Customs was able to surpass last month's collection target by 4.4 percent due to higher import volume, signifying "rising economic activity."

"Recovery is also seen in the manufacturing sector as the economy reopens," he said.

He cited the Monthly Integrated Survey of Selected Industries by the Philippine Statistics Authority, which shows that the capacity utilization of factories as a whole rose to 73.4 percent in May compared to 71.2 percent in April.

The Philippine economy shrunk by 0.2 percent during the first quarter of this year due to effects of COVID-19 and eruption of Taal Volcano in January.

According to Acting National Economic and Development Authority Director General Karl Kendrick Chua and central bank governor Benjamin Diokno, the country's economy could further decline in the second quarter of this year since most parts of the country, including Metro Manila, continued under lockdown.

The government only placed Metro Manila and other parts of the country under a less restrictive general community quarantine last June.

Dominguez said the government would continue with its Build, Build, Build projects to revive the economy.

He also said that to finance the government's expenditures, the Duterte administration would borrow more.

"We have had to borrow money and we are planning to bring up debt-to-GDP (gross domestic product) ratio to around 50 percent from 39 percent and that is still very affordable," the Finance chief said.

He said the government's credit rating is very good.

Since the COVID-19 outbreak early this year, Dominguez said the government has already raised a total of $5.3 billion loans from the development partners; $2.35 billion from its latest global bond offering in the commercial market; and P1.2 trillion in gross domestic borrowings from the domestic sources.

For the COVID-19 response, the Department of Budget and Management has released so far P375 billion.

Dominguez said with President Rodrigo Duterte's early order to impose enhanced community quarantine in most parts of the country, more lives have been saved from COVID-19.

Citing a study of the University of the Philippines, he said the government interventions such as the lockdown have prevented as much as 1.3 to 3.5 million infections.

As of July 7, coronavirus cases in the Philippines rose to 47,873, with 12,386 recoveries and 1,309 deaths. Celerina Monte/DMS