The PH economy amid COVID-19

After quarantine restrictions imposed in the middle of March, the Philippines is now slowly working its way around the coronavirus disease (COVID-19) pandemic with the loosening of restrictions to allow businesses even in several non-essential industries to restart operations, given health and safety protocols. 

From a modified enhanced community quarantine, just recently, the Metro Manila Council, composed of the 17 mayors of the metropolis, have agreed to recommend the transition of the National Capital Region to a general community quarantine (GCQ) albeit still with limitations and restrictions by 1 June.  President Rodrigo is set to decide on the matter before the MECQ imposed in Metro Manila ends on 31 May. While a GCQ would allow more businesses and the economy to breath little following restrictions during the enhanced community quarantine, the COVID-19 crisis have no doubt gnawed at the country’s economic growth outlook as businesses reel from the impacts of COVID-19 measures such as lockdowns and travel bans.  At the Philippine Stock Exchange alone, several big companies forecast rough financial results for the second quarter, or the months April to June, where most of the quarantine period fell.  The services sector such as trade, tourism and remittance are especially seen as most vulnerable, while industries such as e-commerce see rapid growth due to a shift in consumer behavior.  For its part, the Bangko Sentral ng Pilipinas, which has been actively loosening monetary policy to inject liquidity into the domestic economy, states that the country is in a good fiscal position to deal with the challenges owing to the COVID-19 pandemic even though economic contraction is expected. It sees the economy rebounding in 2021.  In view of the expected rebound, about 100 key infrastructure projects under Duterte administration’s flagship program, ‘Build, Build, Build’, has been allowed to resume by the Inter-Agency Task Force as the government looks to accelerate the program as a way to revive the economy.  Earlier, the government said the infrastructure program is under review to prioritize high-yielding flagship projects as it seeks to cut further losses brought by the pandemic.  Meanwhile, while some industries such as tourism suffer significant setbacks due to the pandemic, some industries such as e-commerce experience unprecedented growth as Filipinos opt for digital channels amid mobility restrictions.  The country’s top banks especially reported a spike in cashless transactions and digital account openings since the start of the ECQ in Luzon and other parts of the Philippines in March.  E-commerce platform Shopee Philippines sees e-commerce as a rising key channel for brands and sellers’ businesses as more and more consumers turn to the convenience of online shopping to meet their different shopping needs. Small and medium enterprises, which are greatly affected by quarantine restrictions, in particular could benefit from a wider market reach prompted by digital channels.  Banking on the projected growth, Shopee earlier on launched a P200 million Seller Support Package to help local SMEs and sellers amid the current turbulent business environment. The package provides lowered commission and operational costs, higher sales and marketing support and assistance to new online sellers.  Another leading e-commerce platform, Lazada Philippines, also collaborated with Union Bank of the Philippines’ financial technology arm UBX to provide credit to micro, small and medium enterprises amid the pandemic via UBX’s lending marketplace, SeekCap, underscoring further possible growth in the horizon for e-commerce.  According to a digital trade policy report by the Hinrich Foundation launched last year, the economic value of the Philippines’ digital trade could jump to P1.9 trillion by 2030 from the existing P160 billion with proper government support.  The Department of Trade and Industry last year also said it is re-calibrating the Philippine e-commerce roadmap to 2022 amid the industry’s rapid rise.