NEDA admits Q1 2021 will remain negative

The Philippines will continue to see a negative gross domestic product (GDP) in the first quarter of 2021, the National Economic Development Authority (NEDA) said Friday.

“To be honest, this year will be a slow start. We will ramp up by the middle of the year starting the second quarter,” Acting Socioeconomic Planning Secretary and NEDA chief Karl Kendrick Chua said in a virtual forum organized by the Foreign Correspondents Association of the Philippines (FOCAP).

“Let’s be realistic, in the first quarter nothing significant has changed,” he said.

The Philippine economy saw its worst full-year economic performance since the end of World War II at -9.5% in 2020 due to the impact of lockdowns and global uncertainties due to the COVID-19 pandemic.

Strict quarantine restrictions which began mid-March 2020, considered the longest in the region, has put the economy on a standstill stripping off an annual income loss of P1.4 trillion or P2.8 billion a day from the economy.

“The biggest area of economic productivity is still in GCQ (general community quarantine),” Chua said.

Metro Manila and the Cordillera Administrative Region (CAR) will be under general community quarantine (GCQ) for the whole month of February.

Aside from the two regions, Batangas, Tacloban City, Davao City, Davao del Norte, Lanao del Sur, Iligan City would also be placed under GCQ, according to presidential spokesperson Harry Roque.

The rest of the country will be under modified general community quarantine.

Despite most of the country being under quarantine, the NEDA chief said that people are still working.

“You see 70-80% of workers back, you see some traffic, you see infrastructure being built,” he said.

“Those will continue to improve upon our growth quarter-on-quarter,” he said.

In the fourth quarter of 2020 alone, the country’s GDP improved to -8.3% from -11.4% in the third quarter of last year.

Quarter-on-quarter economic growth is actually positive at 5.6% in the October to December 2020 period.

The NEDA chief said the trend of positive quarter-on-quarter growth will continue in the first quarter of 2021.

“We will begin to see year-on-year positive [growth] starting the second quarter,” Chua said.

The country’s chief economist noted that the Philippines’ economic recovery will depend on how soon restrictions will be lifted.

He said that having a “blanket restriction,” instead of being more open but with safeguards is not going to work.—AOL, GMA News