Economy to grow up to 8.1 percent in 2021 as stimulus kicks in: Finance chief


Posted at May 19 2020 05:55 PM

MANILA - The Philippines will "bounce back" next year with gross domestic product projected to grow between 7.1 percent to 8.1 percent, Finance Secretary Carlos Dominguez said on Tuesday. 

Dominguez said that while the economy is seen posting negative 2 percent to negative 3.4 percent growth this year because of measures implemented to check the spread of COVID-19, the government has prepared several initiatives to revive the economy.

Among them are P1.1 trillion worth of fiscal and monetary measures “to finance emergency initiatives and keep the economy afloat,” and an P846 billion economic recovery program “to get business back on their feet and sustain and create jobs,” Dominguez told a Senate hearing. 

Dominguez said the government is looking at restarting and “accelerating” the Build, Build Build program, “subject to minimum health standards.” He said infrastructure spending was crucial in reviving the economy as construction has a big multiplier effect.

The government is also looking at “mass hiring of contact-tracers” to provide jobs while helping control the spread of the disease, the Philippine Finance chief said. 

Also included in the measures is the passage of reforms on corporate income taxes and financial incentives. 

The Philippine economy shrank 0.2 percent in the first quarter due to the quarantine measures imposed to curb the spread of COVID-19, as well as the eruption of Taal volcano in January.

Metro Manila, which accounts for a third of the country’s economic output, will be on modified enhanced community quarantine until the end of the month. The lockdown of the country’s capital is now already longer than that imposed on the Chinese city of Wuhan where the pandemic started.