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

  • 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.


Qatar Airways expects to keep Airbus A380s parked for years

Updated 19 October 2020

Qatar Airways expects to keep Airbus A380s parked for years

  • State-owned airline parked its 10 A380s due to the devastating impact of the coronavirus crisis on travel demand
  • Qatar Airways boss Akbar Al-Baker criticizes rivals operating the A380 as ‘foolish’

DUBAI: Qatar Airways does not expect to use its Airbus A380s for at least the next two years, its chief executive said on Monday, longer than a previous projection for the superjumbos to possibly return to service in 2021.
The state-owned airline has parked its 10 A380s due to the devastating impact of the coronavirus crisis on travel demand.
“We don’t think we are going to operate our A380s for at least the next couple of years,” Akbar Al-Baker told an online conference.
He had said in June the jets would remain parked until at least the middle of next year. The Gulf carrier plans to start retiring its A380s from 2024 when its oldest superjumbo reaches ten years of service.
The A380s would return once the airline saw the growth rate of 2019, before the pandemic struck, Baker said.
The 100 destinations to which the airline is currently flying is 25 fewer than planned due to a new wave of infections in Europe and travel restrictions, he said.
Baker criticized rivals operating the A380 as “foolish,” saying there was insufficient demand and so prices would be driven down.
Air France retired its A380s this year, while British Airways and Qantas retired their Boeing 747s as the crisis sent air travel into free fall.
Gulf carrier Etihad Airways is mulling whether its parked A380 fleet will ever return, while Emirates, the largest superjumbo operator, has resumed some services with the jet.