NEDA sees positive growth in Q1; economy may lose up to P1.1 trillion this year
The Philippines may have posted a positive growth in the first quarter of this year despite the eruption of the Taal volcano and the ongoing coronavirus disease pandemic, Acting National Economic and Development Authority Director General Karl Kendrick Chua said on Thursday.
In a virtual media forum hosted by the Foreign Correspondents Association of the Philippines, Chua, however, said that for this year, the economy could lose up to P1.1 trillion because of the pandemic.
"My sense is we have a good potential to see a positive growth," he said when asked of the possible performance of the economy during the first quarter.
But Chua acknowledged that the growth would have been lower than the target of 6.5-7.5 percent gross domestic product expansion for this year.
He noted that during the first quarter, three "exogenous" events happened that could have dampened the economy - the Taal volcano explosion; the outbreak of COVID-19 in China; and the coronavirus in the country, which prompted the government to enforce quarantine measures, leading to closure of most businesses.
The government is set to release the official economic performance for the first quarter on May 7.
Chua noted that when 2020 entered, the Philippines was one of the "best prepared economies" not only in the region but globally as well as it averaged a growth rate of 6 percent.
But he acknowledged that the pandemic could a huge impact on the economy this year.
Based on the projection of "zero to even a slightly negative" growth, the possible loses could translate to up to P1.1 trillion based on the current GDP of P18.6 trillion, he said.
Chua noted that based on a latest survey of some small businesses, their losses were about P700 billion since the crisis started.
Meanwhile, Chua expressed optimism that the loss of jobs by some overseas Filipino workers would have a temporary effect on the remittances, which is about a tenth of the country's GDP.
He noted that the Filipinos have been working on "diverse fields" and even with the pandemic, many of them are actively employed in the healthcare sector, as well as other professional services where they are allowed to work from home.
"I think we have established a very good professional brand," he said, adding that after the coronavirus crisis, there could still be strong demand for Filipino workers here and abroad.
Chua also said that despite borrowings that the government has been doing right now to support the COVID-19 response, the debt-to-GDP ratio is still manageable.
Prior to COVID-19 pandemic, he said the debt-to-GDP ratio of the Philippines was at 41.5 percent.
This could rise to about 46-47 percent, which is "still low and manageable," said Chua, who is a former Finance undersecretary prior to his appointment to NEDA.
The government will continue to implement the enhanced community quarantine in some urban and most developed areas in the country, such as Metro Manila, Central Luzon, Calabarzon, Cebu and Davao City due to more cases of coronavirus infection until May 15. In these areas, most businesses are still not operational. Celerina Monte/DMS