Economic Status Of The Philippines – Philippine CEOs see partnerships, digitization, sustainable business practices and private sector-government partnerships to keep businesses afloat in the face of COVID-19.
A year after COVID-19 became a global pandemic, there are still uncertainties around the world. Since the first case of COVID-19 was reported in China in December 2019, more than 175 million cases of COVID-19 and 3.8 million deaths have been reported worldwide. Despite the launch of vaccines and the easing of restrictions in many countries, the road to recovery remains unclear. Although some organizations are beginning to feel more optimistic, it will take years to recover from the economic losses resulting from the pandemic.
Economic Status Of The Philippines
In the Philippines, the first lockdown began on March 16, 2020 and was eased in May 2020. A year later, the government placed Metro Manila, Bulacan, Cavite, Laguna and Rizal under enhanced community quarantine (ECK), the strictest level of quarantine. , due to the increasing number of new cases of COVID-19. With this second ECK during the pandemic, employees, business owners and Filipinos in general felt that the country was back to square one. While vaccination continues, only 4.3% of the total population is fully vaccinated by July 21, 2021.
National Economic And Development Authority
To understand the ongoing impact of the COVID-19 outbreak on businesses in the Philippines, The Philippines, together with Philippine Management, surveyed 131 CEOs from April to May 2021.
In 2020, the Philippines had the worst economic performance with real GDP growth rate falling to -9.6%. Such a decline became the biggest since World War II and worse than the impact of the Asian financial crisis in 1997. Despite the ongoing problems, most CEOs are confident about their industry’s prospects for revenue growth over the next 12 years. months. . Likewise, CEOs are confident of their organization’s revenue growth in the coming years.
Government initiatives that may have helped boost the confidence of business leaders include the Bayanihan Act to Heal as One (Baianihan 1) and the Bayanihan Act 2. The Bayanihan Act 1 was signed into law by President Duterte on March 25, 2020 and was effective for three months. The Bayanihan Act 1 provided funds to meet the requirements of COVID-19 monitoring, testing and treatment, while providing assistance to low-income families and returning Filipinos abroad who are economically displaced due to quarantine restrictions. About 17.6 million and 14 million low-income families received the first and second installments of the Social Improvement Program.
Meanwhile, the Small Business Wage Subsidy Program benefited 2.1 million small business workers adversely affected by the quarantine restrictions. Bayanihan Law 2 was signed by the President on September 11, 2020. The law will help sustain efforts to improve the health system’s capacity, especially regarding contact tracing protocols, testing, and isolation. The law also provides financial assistance to sectors adversely affected by the pandemic, such as which are transport, tourism, education and MSMEs.
Philippines Gdp Rises 4.3%, Below Estimates, With Inflation, Interest Rates High
The government also created the Business Recovery and Business Tax Relief (CREATE) Act. The law, signed by President Duterte on March 26, 2021, reduces the national corporate tax from 30% to 25% for large companies or 20% for companies with total assets not exceeding PHP 100 million and total taxable income not exceeding PHP 5 million.
Although most CEOs are confident of future growth, 67% of respondents believe the recovery will take one to more than three years. Similarly, most CEOs say it will take more than two years for the country’s economy to recover. With the Philippines far from achieving herd immunity and permanent restrictions, 58% of CEOs believe the country’s real GDP growth rate will be below 3% in 2021.
In 2020, 50% of CEOs said that COVID-19 has the potential to impact their business operations. This year, despite initiatives to help organizations recover from the pandemic, 47% of CEOs still say that COVID-19 is a constant concern. Last year, more than 50% of CEOs expected a revenue loss of more than 20%. However, based on current financial results, only 40% of CEOs report a revenue loss of more than 20% in 2020. Twenty-one percent of CEOs also say they have no losses due to COVID-19. Some of the initiatives that may have helped to reduce the impact of business interruption include digitization, changing the product mix and introducing relevant products and services. As companies begin to normalize their operations and people return to the workplace, 43% of CEOs expect to lose more than 10% of their revenue this year due to COVID-19. Industries that continue to face challenges include tourism, entertainment, and traditional retail and food services.
It was in 1997 during the Asian financial crisis that the Philippines had its last recession. At that time, it took five years for the country to achieve real GDP growth of at least 5%. Although the economic contraction is now much deeper, initiatives led by the government and the private sector are expected to help accelerate the recovery. To rebuild and strengthen their companies, most CEOs plan to launch new products and services, explore new markets, and delay capital investments. While most CEOs say they don’t need outside funding for their companies, most agree that tax incentives and a strong recovery plan are essential for any industry. More importantly, an effective and equitable vaccination program will be critical to ensuring the safety of our people and the success of our economic programs.
Philippine Merchandise Trade
In our previous research, CEOs said they plan to invest in initiatives related to digitalization and sustainability, while rethinking their business model and diversifying their products and markets. However, the pandemic has shown us that what worked before may no longer work in the current environment, or even in the years to come. Plans that were still on the table were realized and accelerated to adapt to the new reality. Due to the pandemic, more and more companies have adopted a digital and sustainable way of doing business.
As lives, businesses and economies around the world are disrupted by the pandemic, one message is clear – partnerships, digitalisation, sustainable business practices and private sector-government partnerships are helping to address the impact of the pandemic and the road ahead. .is committed to achieving a prosperous, inclusive, resilient and sustainable Asia and the Pacific, while making efforts to eradicate extreme poverty. Founded in 1966, it is owned by 68 members – 49 from the region.
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News & Events News News Releases Stronger domestic demand to fuel Philippine economic growth in 2022, 2023 –
MANILA, PHILIPPINES (April 6, 2022) – The Philippines’ economic recovery is expected to gain strength this year and next, supported by increased domestic investment and consumption as pandemic restrictions ease, allowing for greater manufacturing and construction activity, according to a recent report. from the Asian Development Bank () today.
The Asian Development Outlook (ADO) 2022, its leading economic publication, projects the Philippine economy to grow by 6.0% in 2022, with a further 6.3% growth in 2023. Government measures issued last month to reopen the economy, abolition of mobility restrictions, expansion. Vaccination against the corona virus (COVID-19) and the easing of international travel restrictions will boost the services sector.
Our Work In The Philippines
“Almost all indicators point to higher growth for the Philippines this year and 2023, barring the impact of external factors such as geopolitical tensions that could slow growth worldwide, including exports in the country’s major markets, Europe and the United States,” the country director said Philippines. Kelly Bird.
“Policies to build the resilience of micro, small and medium enterprises (MSMEs), which play a vital role in the country’s economic recovery, must be strengthened to support digital transformation, business innovation and sector skills development,” said Mr. Bird added. is currently assisting the government in providing employer-led skills training for selected sectors to upskill MSME workers in the Skills Up Net Philippines program.
The capital Metro Manila and areas on the main island of Luzon, which account for about 70% of gross domestic product (GDP), moved to the lowest level of pandemic restrictions in March as daily cases of COVID-19 averaged below 1,000. . and public transport can now operate at full capacity. The government reopened the country to fully vaccinated international travelers from February. This should boost tourism and jobs in the services sector, which accounts for 60 percent of GDP, the report said.
Increased public investment