The Philippines has entered into recession after an unexpected second quarter slump hit its economy hard amid Covid-19 pandemic, media reports said. The country has witnessed a recession after 29 years.
Nicholas Antonio Mapa, an ING senior economist, told the media, “The Philippine economy crash-landed into recession with the 2Q GDP meltdown showcasing the destructive impact of lockdowns on the consumption-dependent economy. With record-high unemployment expected to climb in the coming months, we do not expect a quick turnaround in consumption behaviour, all the more with COVID-19 cases still on the rise.”
It is reported that the current situation in the Southeast Asian nation marks the biggest slump in its government’s quarterly GDP data dating back to 1981. The economy slumped by 16.5 percent in the last three months.
Furthermore, the Philippines’ GDP shrank by 9 percent, which is worse than its first quarter’s revised slump of 0.7 percent. In the second quarter, the seasonally adjusted GDP fell 15.2 percent.
The Philippines government’s decision to shut down the capital city and the neighbouring provinces as a result of the pandemic has worsened the economy.
Few businesses have been strictly ordered to halt operations in Manila and nearby provinces. The capital city accounts for majority of the country’s economic activities. It is reported that there is a massive spike in Covid-19 cases in the Philippines as 115,980 were confirmed this week, following Indonesia.
According to analysts, the central bank of the Philippines has options to ease policies as inflation is expected to remain subdued throughout the year.