Philippine economy shrinks for first time in two decades

Philippine economy shrinks for first time in two decades
Growth in consumer spending, which is the Philippines’ key economic driver, slowed to just 0.2 percent during the first quarter. (AFP)
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Updated 07 May 2020

Philippine economy shrinks for first time in two decades

Philippine economy shrinks for first time in two decades
  • Gross domestic product shrank 0.2 percent in January-March
  • Growth in consumer spending, which is the Philippines’ key economic driver, slowed to just 0.2 percent during the period

MANILA: The Philippine economy contracted for the first time in more than two decades during the first quarter, but officials warned Thursday that the worst was likely yet to come as the nation reels from the coronavirus pandemic.
Gross domestic product shrank 0.2 percent in January-March, its worst performance since 1998 during the Asian financial crisis as the Philippines joins a long line of countries to report devastating figures as a result of widespread lockdowns that have shut down economies.
“Containing the spread of the virus and saving hundreds of thousands of lives, though the imposition of the (quarantine) has come at great cost to the Philippine economy,” Economic Planning Acting Secretary Karl Chua said.
The January eruption of the Taal volcano, which forced the temporary closure of Manila’s main international airport, also took a toll.
Chua said there would be more pain and the economy could further shrink in the second quarter.
“The first quarter, I think, is still respectable given the very difficult environment that we are in. The second quarter might be worse,” he said.
Growth in consumer spending, which is the Philippines’ key economic driver, slowed to just 0.2 percent during the period, hit by the closure of malls and shopping centers in areas under lockdown.
Many areas in the Philippines have been under quarantine since mid-March, and will remain so until at least mid-May, to contain the spread of the virus, including Manila and surrounding areas where most economic activity takes place.
“The current lockdown... will undoubtedly drag GDP deep into contraction as we see how destructive the enhanced community quarantine can be for the consumption-driven economy,” ING senior economist Nicholas Mapa said.
But Chua added that the country could bounce back in the second half of the year as it gradually reopens businesses, adding: “With the progress that we are seeing on the health side, there is a very strong chance that we will have a good recovery.”
The Philippines has detected more than 10,000 coronavirus cases and more than 600 people have died.


UK economy shrinks by 2.6% in November, first drop since April

UK economy shrinks by 2.6% in November, first drop since April
Updated 15 January 2021

UK economy shrinks by 2.6% in November, first drop since April

UK economy shrinks by 2.6% in November, first drop since April
  • The fall in gross domestic product much lower than the average forecast for a 5.7 percent drop

LONDON: Britain’s economy shrank by 2.6 percent in November, the first monthly fall in output since the depths of an initial COVID lockdown in April, as new restrictions were imposed on much of the country to slow the spread of the disease.
The fall in gross domestic product reported by the Office for National Statistics was much lower than the average forecast for a 5.7 percent drop in a Reuters poll of economists.
The Bank of England estimates Britain’s economy shrank by just over 1 percent over the final three months of 2020, and with a new lockdown in place since January the country is likely to have fallen into a double-dip recession.
The BoE ramped up its bond-buying program to almost 900 billion pounds in November and Governor Andrew Bailey said this week that it was too soon to say if further stimulus would be needed.