Business & Economy

Philippine economy contracts for first time since 1998

Manila, May 7 (efe-epa).- The Philippine economy contracted 0.2 percent in the first quarter of 2020 amid the strict lockdown measures, making it the first drop since 1998, according to data published by the Philippine Statistics Authority on Thursday.

The country’s GDP fell 0.2 percent compared to the median growth forecast of 2.9 percent between January and March 2020, the first drop in more than two decades since the fourth quarter of 1998 when the economy contracted 3 percent during the worst financial crisis experienced by Asia.

Due to the COVID-19 pandemic, majority of the Philippines was under land and air movement restrictions. The economic activity of nearly all the sectors of the country was also at a standstill amid the lockdown measures.

The strict lockdown measures has been imposed on the island of Luzon, where half of the country’s population lives – some 57 million habitants – and which contributes to 70 percent of the national GDP.

The 0.2 percent decline contrasts with the 5.7 percent growth in the same quarter of 2019 and from the 6.7 percent of the previous quarter of October to December 2019.

National Economic and Development Authority Secretary Karl Chua said that the Philippines was working on a recovery plan to resume the growth levels it was at before the pandemic and added that the global economy was facing its toughest challenge since the Great Depression.

Chua added that the eruption of Taal volcano – some 80 kilometers (49.7 miles) south of Manila – in January also had a negative impact of the economy as it had led to airports being shut down and flights canceled.

The Philippines has confirmed 10,004 cases of COVID-19 including 658 deaths and 1,506 patients recovered, although the number of fresh cases being reported every day is witnessing a gradual drop, which could result in easing of the strict lockdown measures in Luzon from May 15 onwards and resumption of economic activities. EFE-EPA

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