Tue, 22 Sep 2020

Continued recovery a must as country's GDP shrinks 16.5%

Philippine Information Agency
09 Aug 2020, 00:38 GMT+10

DAVAO CITY, Aug. 7 (PIA)- Pundits in the business and economic field has said that recovery efforts and moves to restore confidence in the economy must continue as a way to cushion the impact of the 16.5 % contraction of the country's Gross Domestic Product (GDP) for the second quarter of 2020.

The global economic impact is very clear, what matters more at this point is that we continue to recover and restore confidence as more areas are opening up," Davao City Chamber of Commerce and Industry Inc. (DCCCII) president John Carlo B. Tria said.

Tria noted that even with ECQ some sectors continued operating such as fruit exports and business process outsourcing (BPOs). And when GCQ (General Community Quarantine) was declared in May many sectors like public transportation started to open up.

He added the gradual opening up during GCQ allowed many to not just recover and innovate under new protocols but also give businesses to adapt by accelerating their online migrations.

Meanwhile economist Ever Abasolo said that the negative growth was the effect of the lockdown, the subsequent decline in private consumption, government and private investment and external trade.

"The key here is implement the P1.3-trillion stimulus plan," Abasolo said.

Last June, the House of Representatives approved a P1.3-trillion stimulus billed called the ARISE (Accelerated Recovery and Investments Stimulus for the Economy) that seeks to rejuvenate the economy which before the COVID19 pandemic was one of the fastest growing in Asia.

Abasolo said the stimulus offers support to displaced local workers, and OFWs by providing them unemployment benefits.

The Davao City-based economist said with the increased borrowings for the stimulus he predicts a Debt-to-GDP ratio of 52 to 54% which before the pandemic reached a low of 39.6% in 2019. But the figures is much lower than the 74.4% in 2004.

While Tria said that stimulus measures focusing on agriculture particularly that Mindanao is the food basket of the country is a wise move. The measures will expand agriculture's growth and cushion the impact of the pandemic on the most vulnerable by providing livelihood for displaced workers of affected sectors like tourism where former workers can shift to fishing or farming.

"Agri posted a quick rebound so i think programs to expand production and improve logistics from farms to markets and consumers need to be strengthened further. Agri will be a resilient part of the economy since it provides basic needs," Tria said.

Aside from agriculture, Tria also noted the importance of continuing the Duterte administration's Build, Build, Build program to help the country move forward.

"In the long-term better infrastructure will improve connectivity, better internet service, port handling systems and road networks to really give our local businesses access a boost," Tria said.

The economic impact of the pandemic and recovery efforts will be tackled in the coming Mindanao Business Conference on September 10-11 and the launch of the first ever virtual Davao Agri-Trade Expo (DATE) which will be on the end of September. (PIA/RG Alama)

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