Loading
Breaking
Now Reading: ECONOMIC BOUNCE BACK | Finance head boasts Philippine economy starts to pick up
ECONOMIC BOUNCE BACK | Finance head boasts Philippine economy starts to pick up
July 31, 2020 , 03:51 PM

By Katrina Elaine Alba and Chenny Ramos

(July 31, 2020) – The Philippine economy has started to bounce back after two quarters of contraction, the finance secretary has said as he supported moves to further ease restrictions and allow more businesses to reopen despite the uncontrolled spike in coronavirus cases

In a meeting Thursday night with the president, Carlos “Sonny” Dominguez III said the government has enough funds to raise about 20 billion pesos to buy at least 40 million doses of a potential COVID-19 vaccine by December.

“The economy is actually beginning to recover,” Dominguez, who had also served as agriculture secretary in the past administration under Fidel Ramos. The president’s meeting was shown on national television only on Friday.

“We already hit the lowest part, which was April-May. Yun ang pinakamababa as we can see, it’s already picking up now.”

The government’s economic managers said they expected a big rebound next year, with the economy growing between 7.1 percent and 8.1 percent, supported by an economic recovery programme to cushion the impact of the pandemic.

The Philippines, which had been one of Asia’s fastest-growing economies before the pandemic, is on the edge of a recession after growth unexpectedly shrank 0.2 percent in the first quarter, dashing forecasts for 3.1 percent growth.

The gross domestic product was expected to decline 2 percent to 3.4 percent this year, worse than the government’s forecast of -1.0 percent to 0.0 percent growth in March.

This year’s budget deficit was estimated to reach 1.56 trillion pesos or 8.1 percent of GDP, a far bigger shortfall than the government’s 5.3 percent forecast in March, and more than double its original estimate of 3.2 percent.

Government’s outstanding debt has also ballooned to 9.054 trillion pesos by the end of June 2020, compared to the 7.86-trillion peso for the same period last year.

The Bureau of Treasury said the government borrowed heavily from domestic lenders amounting to 6.19-trillion pesos or 68 percent.

External debt has reached 2.86-trillion pesos, or 32 percent.

About $7.78 billion of 380 billion pesos were used in the pandemic response,

“Wala ho tayong problema sa liquidity. The economy is not short of money,” Dominguez said, “Ang peso ho natin is the strongest in Asia. The strongest currency in Asia, stronger than the Japanese yen.”

The Asian Development Bank (ADB) has projected a deeper decline in the Philippine’s growth could contract by as much as 5.3 percent this year.

But Dominguez was more upbeat, citing credit agency Moody’s affirmation of “Baa2” rating and “stable” outlook for the Philippines.

“People have faith in us, we are able to finance by borrowing locally and internally. We are in good shape to overcome this crisis,” he said on Friday.

BURDEN DEBT ON FILIPINOS

Some have noted the 9-trillion peso debt would mean that each Filipino’s share of the burden would be 83,239 pesos.

But an economic expert told News5 this was no cause for concern.

“Ang kailangan tignan ay may kakayanan tayo bilang isang bansa, hindi bilang isang indibidwal, yung buong ekonomiya,” said Filomeno Sta. Ana III, co-founder and coordinator of think thank Action for Economic Reforms (AER).

While Sta. Ana said the public would be paying the debt through their taxes, he said the focus should not be on the individual’s capacity to pay that amount.

Some of the indicators of a country’s ability to pay its debts are its debt service ratio and debt-to-GDP (Gross Domestic Product) ratio.

The country’s ratio of debt service burden to exports of goods and receipts of services increased from 5.7 to 8.9 percent for January to March 2020.

As for the country’s debt-to-GDP ratio, Dominguez said in a pre-State of the Nation Address (SONA) forum in early July that they “managed to bring down our debt-to-GDP ratio to a historic low of 39.6 percent.”

But with the growing debt to finance the Philippines’ COVID-19 response, the finance department said they would aim to keep the debt below 50 percent.

He also said that the deficit-to GDP ratio would likely more than double as tax collections drop and the government would spend more in its coronavirus response.

Sta. Ana though, believes this would not go as low as previous financial crises in Asia.

“We should not worry over a debt crisis. We are far from having a debt crisis,” he said. (MM)

More From News5
Nasa 33,000 sa Cebu, tumanggap ng ayuda kahit ‘di kwalipikado
Bukod sa COVID-19, pinoproblema na rin sa Cebu ang nasa 33,000 na nakakuha ng ayuda pero hindi naman qualified. Mayroon din daw nasa 1,000 na doble ang nakuha.
Published On: July 12, 2020
PNP Central Visayas chief, tiwalang makababalik din sa GCQ ang Cebu City
#SaTotooLang | Tiwala ang hepe ng PNP Central Visayas na kaya nang bumalik sa general community quarantine ng Cebu City sa loob ng dalawang linggo, na unang sinabi ni Secretary Roy Cimatu. Aniya, kahit patuloy ang pag-akyat ng mga kaso ng #COVID19 sa lungsod ay dapat din daw tignan ang bilang ng mga gumagaling sa sakit.
Published On: July 12, 2020
'Emerging COVID-19 hotspots,' binabantayan na ng DOH
Tinututukan na ng Department of Health ang anim na lugar sa Visayas dahil sa onti-onting pagdami ng mga kaso ng #COVID19 dito, kabilang na ang Cebu.
Published On: July 12, 2020
Pagkamatay ng mga isda sa Laguna Lake, 'di raw dahil sa COVID-19
Nilinaw ng Bureau of Fisheries and Aquatic Resources na hindi ang COVID-19 ang naging dahilan sa pagkamatay ng 800 metric tons ng isda sa Laguna Lake, na nagdulot ng pagkahina ng bentahan sa mga palengke. | via Gary de Leon
Published On: July 12, 2020
Pamimigay ng PWD IDs sa Q.C., itinigil muna
Pansamantalang itinigil ng Quezon City ang pag-issue nito ng PWD card matapos madiskubreng nakakuha rin ng card na nagbibigay discount sa ilang serbisyo ang mga wala namang kapansanan. | via Jenny Dongon
Published On: July 12, 2020
Grade 7 student, viral matapos i-enroll ang sarili
Viral sa social media ang kwento ng isang batang ini-enroll ang sarili sa isang computer shop sa Caloocan. Ang ama naman ng bata, aminado ring hindi pamilyar sa makabagong paraan ng pag-enroll para sa nalalapit na pasukan. | via JC Cosico
Published On: July 12, 2020
Is Philippines ready for the blended learning scheme?
The kid who went viral online after struggling to enroll via piso-net, or coin-operated prepaid Internet, now faces an even bigger problem: He has no gadgets for DepEd's blended learning scheme.
Published On: July 12, 2020
DOLE, planong magbigay ng P40-B ayuda sa mga manggagawa
Planong magpatupad ang DOLE ng P40-B wage subsidy para sa mga manggagawang apektado ng COVID-19 pandemic. Nasa 90,000 na kasi ang nawalan ng trabaho dahil sa krisis.
Published On: July 12, 2020
OWWA, nanganganib ma-bankrupt dahil sa COVID-19 pandemic
Nagbabala ang Overseas Workers Welfare Administration na malapit na itong ma-bankrupt dahil sa patuloy nitong pagtulong sa mga OFW na nawalan ng trabaho dahil sa #COVID19 pandemic. | via Marie Ann Los Baños
Published On: July 12, 2020
DOH, ipinaliwanag ang mga kasalukuyang datos sa COVID-19
Ipinaliwanag ng Department of Health na kahit pataas ang COVID-19 cases sa bansa, gradual ito at hindi biglaan. Bumaba rin daw ang positivity rate dahil sa lumalawak na testing capacity. Naobserbahan naman ng kagawaran ang emerging hotspot (lugar kung saan dumarami ang kaso) sa Cebu City, Cebu province, Ormoc City, Southern Leyte, Leyte, at Samar.
Published On: July 12, 2020
Top Stories
POOR RESPONSE | Philippines has lowest COVID-19 recovery rate among Southeast Asian countries
By Manny Mogato, News5 Editor-at-Large (August 8, 2020) — The Philippines has the lowest recovery rate of coronavirus infected patients as well a
Published On: August 8, 2020
MANILA’S DIRTY HARRY | Ex-Mayor Alfredo Lim dies, 90
By: Manny Mogato, News5 Editor-at-large (August 8, 2020) — The Philippine capital’s former tough mayor, known as “Dirty Harry” died on Satu
Published On: August 8, 2020
COVID-FREE PROVINCE | COVID-free Batanes pushes for face-to-face learning
By Von Belinario (August 07, 2020) – The governor of the country’s northernmost province of Batanes has been pushing a face-to-face learnin
Published On: August 7, 2020
BREWING STORM | Low pressure area may become a tropical depression and bring rains in virus-hit Philippines
(August 07, 2020) – The virus-hit Philippine capital may experience more rainy afternoons as a low pressure area east of the main island of L
Published On: August 7, 2020
COVID CASES RISE | Philippines reports COVID cases exceed 122,000, 8th in Asia
(August 07, 2020) – The Philippines’ total number of confirmed coronavirus disease 2019 (COVID-19) cases has risen to more than 122,000, th
Published On: August 7, 2020