A pandemic such as COVID-19 may be a total harm for all sectors and individuals. But it also presents opportunities for us to reshape and redesign the country's economic landscape to achieve the long-dreamt aspiration for equitable and inclusive growth
The country is feeling the massive economic impact of COVID-19 based on the latest GDP growth and unemployment figures.
The Philippine Gross Domestic Product contracted by 0.2% year on year during the 1st quarter of 2020 due to the impact of both the Taal Volcano eruption and COVID-19 pandemic. Declines were significant in the investment, logistics, hotel and restaurant, and manufacturing sectors.
The Philippine unemployment rate rose to an unprecedented high of 17.7% in April 2020, which is the highest since April 2005 when the government started to change methodology in measuring employment. This translates to about 7.3 million jobless Filipinos due to the impact of the countrywide lockdowns (community quarantine) implemented from March to May of this year. Based on studies by the Philippine Statistics Authority, the recreational, construction, food and accommodation sectors saw the largest drop in employment. It is also important to note that all regions in the country reported double figure jobless rates, which is indicative of the nationwide economic impact of COVID-19.
The plunge in both GDP growth and employment is expected to worsen at the conclusion of 2Q2020 economic reporting. Based on current forecasts, the Philippine economy is expected to grow by a measly 2.0% at best by the end of the year.
In response to this recent economic meltdown, the government vowed to implement priority policies and strategies in agriculture and fishery industry, services and tourism to revitalize the economy and transition to the new normal.
To cope with the difficulties brought about by COVID-19, small and medium businesses have moved to various online platforms such as social media to play their trade. It is important to note that Micro, Small and Medium Enterprises account for 99.5% business establishments in the Philippines. However, it is equally important to note that the remaining 0.5% are the country's biggest conglomerates and companies which employ thousands of Filipinos.
The Philippine economy will be forced to adapt and innovate under the new normal in order to recover during and post COVID-19. Government will be hard-pressed to sell assets or lend money from international lending agencies to support relief and recovery programs and continue the required welfare programs to support the COVID-19 affected and marginalized households. Employers will continue to restructure their business models to survive, which means that more will be unemployed in the next couple of months.
As a way of reinventing the economy, the following sectors may have to consider the following:
· The entertainment sector must find ways to disseminate revenue-generating content, considering the growth of online users today.
· The services industry must strengthen its contact-less systems and delivery services to ensure a stable flow of clientele and customers.
· Traditional businesses must become more open to remote working systems and invest in software platforms and cloud-based services to ensure business continuity and reduce overhead costs.
One thing is for certain in these times: the usual and formulaic economic solutions will not work considering the unique circumstances brought about by the COVID-19 pandemic. The government, private sector and citizens must discover innovative ways to survive and grow during these times.
A pandemic such as COVID-19 may be a total harm for all sectors and individuals. But it also presents opportunities for us to reshape and redesign the country's economic landscape to achieve the long-dreamt aspiration for equitable and inclusive growth.BLOG COMMENTS POWERED BY DISQUS