MANILA – Trade Secretary Ramon Lopez has expressed optimism that through gradual reopening of the country’s business activities, even under strict rules, the Philippine economy will recover after it contracted by 6.5 percent in the second quarter of this year.
“We recognized the primacy of health over economy, as the country tried to build up more testing capacities and health and treatment facilities,” Lopez said, adding that the reopening of businesses will proceed on even as he stressed the need to keep strict health protocols in place
Lopez said the government also recognizes that the country is now on the second phase in its anti-Covid fight, “where the general direction is toward the safe and gradual reopening of the economy to bring back jobs for Filipinos but still ensuring strict health protocols.”
The DTI, he said, will push its ‘REBUILD’ strategy. The acronym stands for ‘Revitalizing Businesses, Investments, Livelihoods, and domestic Demand.’ “Part of stimulating demand is the current DTI campaign to ‘Buy Buy Buy Local’, to patronize locally produced goods to generate more local employment,” he added.
In a related development, Fitch Solutions in its recent report, said consumer spending habits in the country this year will have a more negative impact than the Great Financial Crisis over a decade ago.
“Over 2020, we forecast real household spending to contract by -4.0 percent year-on-year, a significant drop from the 5.5 percent year-on-year growth we estimate for 2019,” the report said. During the 2009 global financial crisis, the country’s household spending declined by 2.9%.
Fitch Solutions noted that according to Google mobility data, travel to retail and recreational outlets dropped when the community quarantine measures were announced.
It slightly improved last May when the government eased lockdown measures but improvement stalled from June 1 onwards despite the lifting of restrictions, the report said.
Fitch Solutions, however, has an optimistic outlook for next year. “This easing, along with the government’s stimulus plan, leads us to project a recovery in consumer spending, as we look into 2021. We believe there is the potential for consumer spending to bounce back in 2021 and we are forecasting real household spending to expand by 6.3 percent year-on-year,” it said. (With PNA)