Philippine economy shrinks record 9.5% in 2020 from COVID- 19

The Philippine economy shrank a record 9.5 percent in 2020, official data showed on Thursday, after coronavirus measures devastated the retail and tourism sectors while a series of natural disasters wrecked crops.

But Acting Socioeconomic Planning Secretary Karl Kendrick Chua said the outlook for 2021 was “encouraging” as measures introduced to contain the virus are eased further and the country prepares for a vaccination drive.

“We will see more economic activity in the months ahead,” Chua said. “This will lead to a strong recovery before the end of the year when the government will have rolled out enough vaccines against COVID- 19 for a majority of our people.”

GDP shrank for four straight quarters in 2020, the Philippine Statistics Authority said.

The full- year figure was the worst since records began in 1946 and ended more than two decades of annual growth.

Accommodation and food services were among the sectors hardest hit by lockdowns and other measures that left millions jobless. A series of typhoons and a volcanic eruption in the natural disaster- prone country also destroyed cash crops.

Chua warned a more robust recovery was being hampered by stay- at- home orders for children, which were preventing families from visiting shopping malls – the centers of community life and consumer spending in the Philippines.

Earlier this week, President Rodrigo Duterte overturned a decision by his coronavirus task force to lift the restriction on children aged 10 to 14.

“Economic growth will be hard pressed to make a stronger recovery if children and families are restricted from participating in the economy as up to 50 percent of nonessential retail sales are driven by family spending,” Chua said.