The Philippine economy sank 9.5% in 2020, the worst since 1984’s recorded 7.0%, according to the latest data from the Philippine Statistics Authority (PSA). The government agency also said all three major economic sectors (agriculture, forestry, and fishing) registered contractions of 2.5% in the fourth quarter of last year. One of the biggest contributors to the decline of the gross domestic product (GDP) growth in the fourth quarter is the construction sector at -25.3%.
The gross national income decreased by 12% in the fourth quarter of the year, while 11.1% for the whole of 2020. In comparison, the net primary income from around the world also went down by 53.2% during the fourth quarter.
The report states that the fourth-quarter GDP decline improved from the revised 11.4% contraction in the third quarter. In addition, government spending grew by 10.4% while household spending declined 7.9% for the whole of 2020.
While the Philippines has slowly been recovering from the pandemic in the latter months of 2020, the natural disasters back in October to November created an economic dilemma for several industries.
The crisis left a huge scar on work opportunities, with the unemployment rate hitting a high 17.7% back in July. However, it had slowly receded to 10.2% as of early January 2021.
The Development Budget Coordinating Committee earlier announced the revision of the 2020 GDP target to a range of -8.5 to -9.%. They expect the GDP to bounce back between 6.5% to 7.5% in 2021.
Despite these findings, some economists and business veterans believe that the country is capable of facing the negative impacts of the pandemic. Bangko Sentral ng Pilipinas Governor Benjamin Diokno mentioned in a webinar of the Makati Business Club last May 2020 that the volatility of real GDP and inflation declined considerably over time. He also shared that aggregate demand in the post Global Financial Crisis period expanded at an average rate of 6.4% annually, comparable to the growth rates of China and India.