MANILA: The Philippine economy shrank a record 16.5 percent in the second quarter from a year ago, the nation’s statistics authorities said Thursday, with the country’s strict lockdown measures to fight the spread of the new coronavirus taking a toll on Southeast Asia’s third-largest economy.
The drop is the largest since comparable data became available in 1981 and follows a 0.7 percent year-on-year decline in the first quarter of the year, plunging the country into a technical recession, which is defined as two consecutive quarters of negative growth, report agencies.The Philippine Statistics Authority said gross domestic product fell mainly due to declines in manufacturing and construction, which dropped 21.3 and 33.5 percent respectively. Manufacturing makes up 62.2 percent of the country’s industrial sector.
It said the transportation and storage sector logged a hefty 59.2 percent decline. That was the result of operations being halted due to a series of strict quarantine measures implemented since March on the island of Luzon, Metro Manila and key cities in the country.
Services, which include accommodation, food services and real estate businesses, declined by 15.8 percent in the quarter. Philippine economists say, while the pandemic is testing the economy like never before, the country is in a much stronger position to weather the current crisis.
“We entered the crisis with a very strong economy. Our macroeconomic fundamentals are one of the best in history,” Karl Kendrick Chua, acting secretary of the National Economic and Development Authority, said during the press briefing. “Our strength comes from successfully enacting important game-changing economic, social and institutional reforms that have better prepared us for the unique challenges we face today,” he added.
President Rodrigo Duterte ordered late Sunday that Metro Manila and four nearby provinces revert to tighter quarantine restrictions from Aug. 4 to 18, as coronavirus cases in the country soared past 100,000.