MANILA - The Philippines' finance chief said on Thursday the country has been hit hard by the COVID-19 health crisis and that the economy may not experience any growth this year.
In a televised briefing with President Duterte aired early Thursday, Finance Secretary Carlos Dominguez III said Gross Domestic Product (GDP) growth this year could be as low as 0 to -1 percent.
"Itong COVID-19 has hit us in a very hard way. Ang katotohanan lang, ang estimate natin, our GDP growth will be 0 or -1 percent," he said.
(This COVID-19 has hit us in a very hard way. The truth is, we estimate that our GDP growth will be 0 or -1 percent.)
Dominguez also said unemployment is estimated at 1.2 million workers, but added that this figure is comparable to the lowest unemployment rate the Philippines has experienced.
He said the budget deficit is expected to increase from 3.2 percent to 5.3 percent.
"In other words, we will be spending more than we are collecting but we will be spending more in order to save the people and make sure that they have food on the table during this time," Dominguez said.
The debt to GDP ratio is also expected to increase from 41 percent to 47 percent.
"So ang debt to GDP natin ho tataas from 41%, siguro aabot ng 47%, pero that is still very low in compared to our neighbors. May isang neighbor tayo, 80% ng GDP ang utang nila," Dominguez said.
The Philippine economy last contracted, by 0.6 percent, in 1998 during the Asian financial crisis, according to ABS-CBN Data Analytics.
PH ECONOMY 'WELL-PREPARED' FOR COVID-19
Even with the current crisis the country is facing, Dominguez said the country is well-prepared for it.
"Maganda 'yung position ng economy natin so kaya even though we have a bad luck to have this COVID-19, we are very well-prepared," he said.
(Our economy is in a good position so even though we have bad luck to have this COVID-19, we are very well-prepared.)
"Ang growth ho natin from 2016 ay average 6.4 percent. 'Yung collection natin ng income ng government is the highest in 22 years as a percentage of our growth," Dominguez added.
(Our growth rate from 2016 is 6.4 percent on average. The government's income collection is the highest in 22 years as a percentage of our growth.)
In 2019, the country's tax revenue to GDP rose to 15.2 percent or P2.8 trillion in revenues.
Dominguez said he is confident that the government would be able to overcome the COVID-19 crisis
"We are confident ho na we have the financial capability to bridge this problem that COVID has brought us," he said, addressing the chief executive.
"We want to assure all our citizens that at this point in time, we have the money, although we have to realize na hindi naman endless itong pera na ito so we have to spend it correctly. Hindi yung for wasteful expenditures," Dominguez added.
(We want to assure all our citizens that at this point in time, we have the money, although we have to realize that we don't have an endless supply so we have to spend it correctly. We shouldn't use it for wasteful expenditures.)
Dominguez also thanked Duterte for his conservative economic policies, which he said would enable the country to withstand the crisis.
"Mr. President, you have created an economy that can stand a hard hit and I think the Filipino people should thank you for your very conservative economic policies," he said.
According to Dominguez, the government is already working on a recovery program for the economy.
"Right now we are working on our recovery or bounce-back program. But to do that, we have to analyze first what is the damage to the economy," he said.
The government has already started with a survey to help analyze which among the sectors of the economy have been severely hit by the crisis.
"We had a survey and we have already received 44,000 respondents and we will analyze that para matingnan natin kung saan ang malaking damage, sa tourism, sa manufacturing at kung anong mga companies ang natamaan ng masama," Dominguez said.
(We had a survey and we have already received 44,000 respondents and we will analyze that to see which among the sectors were severely affected, tourism, manufacturing as well as companies that were severely affected.)
Dominguez also said the government will be borrowing more money to support the economy amid the ongoing crisis.
"Right now, tinatap natin ang kaibigan natin sa ADB [Asian Development Bank] at sa World Bank, and we would probably be borrowing mga $5.6 billion. Kung kulang pa ito, we will go to the commercial market," he said.
(Right now, we are tapping our friends from ADB and the World Bank and we would probably be borrowing around $5.6 billion. If this is still not enough, then we will go to the commercial market.)
Under the Bayanihan to Heal As One Act, the government realigned funds in the 2020 national budget to be used for the country's COVID-19 response.
As of Wednesday, the Philippines has a total of 3,870 confirmed COVID-19 cases, with 182 deaths and 96 recoveries.
The Philippines is in a state of public health emergency and calamity over COVID-19 that has spread out of its origin, China, to nearly 200 countries and territories since it was first detected late last year.
Over 60,000 people have lost their lives to COVID-19 and there are more than a million confirmed cases with the outbreak yet to reach its peak across the developed and emerging world.