Economic Watch: Philippine economy registers strong growth after five quarters of decline


A sales assistant arranges fruit at the fresh produce section in the supermarket at the SM City Bacoor shopping mall in Bacoor, Cavite province, the Philippines. The Philippine economy grew 11.8 per cent year-on-year in the second quarter this year, ending five straight quarters of decline in gross domestic product (GDP). - Bloomberg

MANILA, Aug 23 (Xinhua): The Philippine economy grew 11.8 per cent year-on-year in the second quarter this year, ending five straight quarters of decline in gross domestic product (GDP).

The administration of President Rodrigo Duterte claimed credit for the strongest growth since the fourth quarter of 1988, highlighting its balanced efforts in tackling COVID-19 and boosting jobs and incomes.

FLEXIBLE LOCKDOWN ALLOWS RECOVERY

The performance came after the Philippine government in April revamped the "enhanced community quarantine (ECQ)" imposed last year in the metro Manila area and other parts of the country, allowing the regions, which account for 75 percent of the economy, to return to normal.

Under the initial ECQ policy, which was put in place in March 2020 and is by far the strictest, restaurants, malls and other retail trade except for groceries and pharmacies were closed; manufacturers of non-essential products and construction projects were halted, and public transportation was paralyzed.

This year, a two-week ECQ came into force in March, followed by a modified one in April, with only 16 percent of all businesses remaining closed, showing proof of significant economic activities, according to the Department of Trade and Industry.

The Philippine economy had witnessed its longest decline since the second quarter of 2020 at a low of -17 percent, to -11.6 percent in the third quarter, -8.3 percent in the fourth quarter, and -3.9 percent in the first quarter of 2021.

MORE INVESTMENTS, JOBS

The country's unemployment rate in June was down to 7.7 per cent, compared with a 17-per cent jobless rate in April 2020, according to the Philippine Statistics Authority (PSA).

Karl Kendrick Chua, secretary of Socioeconomic Planning, said in July that there were 2.2 million more jobs in the Philippines as of May 2021 than before the pandemic.

A sharp increase in investments gives another clear indicator of recovery, given a 75.5-per cent total investment growth and 94.9-per cent surge in private investment, showed data from the country's central bank.

Foreign direct investment (FDI) net inflows into the Philippines jumped 37.8 per cent to US$ 3.48 billion for the first five months of 2021, compared with the same period last year.

"China's investment heralds the (Philippines') renewed economic momentum, which has grown 11.8 per cent year-on-year," said Shan Saeed, a chief economist at Juwai IQI's Malaysia office, referring to factors behind the growth.

CHINA AS KEY PARTNER

Data from the PSA showed that China remains the Southeast Asian country's key trading partner amid the pandemic. Despite challenges from the pandemic, both countries have kept their economies open for each other.

China has helped the Philippines pave a path towards economic recovery and defeat the pandemic, Saeed said.

"China regards the Philippines as an important player in the Belt and Road Initiative and its geographical significance brings the two countries together," said Saeed.

"President Duterte has played his cards very intelligently to secure much-needed investment from China for the economy to move forward to achieve a higher level of growth and economic progression. China's support has been unwavering to his economic plans," Saeed said.

Duterte thanked China for supporting the fight against Covid-19 after a batch of Sinopharm Covid-19 vaccines donated by the Chinese government arrived in Manila on Friday.

Indeed, "solidarity and cooperation are the most powerful weapons to defeat the pandemic," Saeed said.- Xinhua

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Philippines , Economy , Growing , Covid-19 , Cases , Controlling

   

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