April 09, 2021
ECCP at Work
The Philippine economy contracted by 9.6 percent instead of 9.5 percent in 2020, according to the revised estimates released by the Philippine Statistics Authority on Thursday. Fourth-quarter gross domestic product (GDP) for 2020 was kept at -8.3 percent, the PSA said in a statement. However, the PSA further lowered the second-quarter GDP growth rate to -17 percent from -16.9 percent. This was already the worst contraction since the end of World War 2, and had also already been lowered from -16.5 percent last year.
Local government units in Metro Manila and four adjacent provinces have started providing emergency subsidies this week to their residents as they continue to be under enhanced community quarantine. See the list of Metro Manila LGUs that have posted information on the schedules of their subsidy distribution as of April 7, Wednesday.
The Food and Drug Administration on Wednesday said it would be “irresponsible” to allow the distribution of Ivermectin to the public, reiterating there is insufficient scientific evidence for the anti-parasitic drug’s use as a possible COVID-19 treatment. Speaking to CNN Philippines, FDA Director General Eric Domingo said that testimonials and anecdotes from those who have taken the drug are not counted as strong basis for the recommendation of its use.
The Food and Drug Administration took a 180-degree turn and approved the use of the vaccine from China’s Sinovac Biotech on senior citizens. “After considering the recommendation of the experts and the current situation of high COVID-19 transmission and limited available vaccines, the FDA is allowing the use of Sinovac on senior citizens,” FDA Director General Eric Domingo said in a statement.
The country's factory output saw a slight decline in March but the level remained on expansionary territory, according to a recent survey of local manufacturers conducted through purchasing managers. Data analytics firm IHS Markit estimated March manufacturing output at 52.2 points on its Philippines Manufacturing PMI index, a bit down from the 52.5 in February. However, the latest figure is still well above the PMI's 50.0 neutral value that separates expansion from contraction.
An official leading the country's COVID-19 response rejected Tuesday calls for mass testing during the lockdown in the Greater Manila area, and instead stood by "targeted" screening for the respiratory disease. Experts are "united" in urging against the testing of the whole population, said Vince Dizon, deputy chief implementer of the National Task Force Against COVID-19.
The International Monetary Fund (IMF) sees the Philippine economy bouncing back slightly faster than previously expected this year, but noted it is “critical” to contain the surge in coronavirus disease 2019 (COVID-19). In its World Economic Outlook titled “Managing Divergent Recoveries” published on Tuesday, IMF said it expects the country to grow by 6.9% this year, faster than the 6.6% estimate it gave in January. This outlook is well-within the 6.5% to 7.5% target set by the government.
THE slight dip in the country’s inflation numbers in March affirmed the Bangko Sentral ng Pilipinas continued accommodative stance to support the ailing economy, the BSP governor said on Tuesday. In his statement after the Philippine Statistics Authority (PSA) announced the 4.5-percent March inflation, BSP Governor Benjamin Diokno said the latest outturn is consistent with their initial expectations.
The Bureau of Internal Revenue (BIR) on Tuesday said it will not extend the April 15 deadline for filing and payment of annual income tax returns (ITR). As a relief for taxpayers, Mr. Dulay said the BIR will allow the filing of a tentative ITR before the deadline and give them until May 15 to amend the returns without penalties.
The Philippine economy is expected to grow below the government’s target this year, according to economic managers, as the capital region and nearby provinces were placed under the strictest form of lockdown to curb the spike in coronavirus disease 2019 (COVID-19) cases. The DBCC has set a 6.5-7.5% growth target for this year and projected 8-10% growth in 2022. The economy contracted by a record 9.5% in 2020 as the Philippines implemented one of the world’s longest and strictest lockdowns.
Economic frontliners and indigents may be rolling up their sleeves to get their COVID-19 vaccine shots starting May. Vaccine czar Carlito Galvez Jr. stated that some Metro Manila mayors have already recommended that inoculation of the A4 priority sector, also known as economic frontline workers, be started.
Presidential Spokesperson Harry Roque said a week-long modified enhanced community quarantine or MECQ may be the next step following the extension of ECQ in NCR Plus — an area that is home to over 25 million people and which also includes Bulacan, Cavite, Laguna, and Rizal.
Extending the enhanced community quarantine (ECQ) in the country’s main economic hub, as well as Bulacan, Cavite, Laguna and Rizal, could shave at least one percentage point off gross domestic product (GDP) this year and further slow economic recovery, Michael L. Ricafort, chief economist at Rizal Commercial Banking Corp. said.
In a statement on Monday night, acting Socioeconomic Planning Secretary and Neda chief Karl Kendrick Chua urged a “more intensified implementation of the prevent, detect, isolate, treat, and recover (PDITR) strategy” as the lockdown in areas accounting for half of the economy would take its toll on livelihoods while the country struggled with new and faster-spreading COVID-19 variants.
The Bureau of Internal Revenue (BIR) released the draft guidelines for the implementation of the law that will immediately slash corporate income tax to 25% from 30%. Based on the draft guidelines, regular corporate income tax rates will be retroactively reduced by 42 basis points (bps) starting July 2020. This means that the applicable rate for July 31 will be at 29.58% (from 30%) and will be brought down each month by another 42 bps until it reaches 25% by June 30, 2021.
The government through CREATE, Acting Secretary Karl Kendrick Chua said, will be able to provide immediate relief to micro, small, and medium enterprises (MSMEs) and enable the Philippines to attract foreign direct investments (FDI), especially after the pandemic.