PH may come out in better shape after COVID-19 pandemic

If it plays its cards right, including telling the brutal truth than giving false hopes, the Philippines could come out of this crisis in better shape than most developing nations, according to a management consultant.

During the very first online Management Association of the Philippines General Membership Meeting tackling the topic “Leading Through the COVID-19”, Tully Moss, consultant of John Clements Consultants Inc., who joined from Boston, US, said the pandemic will usher global economic recession with uncertain duration but the Philippines may be able to avoid such.

“Like the rest of the world, the Philippine GDP growth will slow down, but may be able to avoid recession,” said Moss.

Estimates from the Asian Development Bank and the Boston Consulting Group have estimated 1.7 percent (severe case) and 0.3 percent (moderate case) reduction in the country’s GDP due to COVID-19 impact. Moss also noted that data showed the Philippines is no worse off than its Asian neighbors.

From original growth target of 6.5 to 7.5 percent, the Bangko Sentral ng Pilipinas has projected a lower GDP of between 5 percent to 5.5 percent this year while the S&P was looking at a lower 4.2% growth. The Philippine economy grew 5.9 percent in 2019, lower than the 6.2 percent growth in 2018 on soft global markets due to the US-China trade war.

“It could be a slowdown in GDP growth in the Philippines this year, but may avoid a recession,” he said.

Imperative to the Philippines,

he stressed, is to get the COVID-19 infections under control. He warned against the Philippines to be seen as a pariah nation.

It should also address significant health, social and economic challenges, including people living in poverty who may be get poorer, reduced OFW opportunities and remittances, and some decline in BPO opportunities.

While the Philippines faces these challenges, Moss said there are likely to be opportunities. He cited opportunities in a recovering Asia, domestic travel and in adapting strategies.

He said that although the US and EU are the worst hit, these are the markets for the Philippines. “The US economy is still highly resilient with $4 trillion in stimulus package being pumped into the economy. Three-fourths of the US workforce will still have jobs and money; the other one-fourth will get aid so demand will still be maintained and when the economy reopens, customers will arrive,” he said.

In terms of what kind of business organizations that are likely to get ahead of the curve, Moss said, these are companies that think like a startup, which implements the innovation wheel, and big corporates that do not panic at crisis but resilient to preserve employment because there are future opportunities.

“The best companies do more than survive, they position themselves to thrive in the future upturn,” he said.

According to Moss, “Downsizing in a downturn can do more harm than good. Companies with few or no layoffs perform significantly better than those with large numbers of layoffs.”