May 14, 2021
ECCP at Work
Economists are downgrading their economic growth forecasts for this year, and some of them even for next year, following the country’s disappointing first quarter output. While consensus forecasts had expected the economy to remain in recession in the first quarter, the 4.2-percent year-on-year gross domestic product (GDP) decline was steeper than the expected 3.2-percent contraction.
It will cost the government P20 billion to procure additional COVID-19 vaccines needed to inoculate minors aged 12 to 17, Finance Secretary Carlos Dominguez III said. In total, the government will need to raise P55 billion more to purchase booster shots next year for 70 million adults and vaccines for 15 million teenagers in the expanded vaccination program.
The Department of Budget and Management (DBM) has released P3.61 trillion or 80.2 percent of the P4.506-trillion 2021 national budget during the first four months of the year. Out of the funds under the 2021 national budget, allotment releases from January to April amounted to P2.46 trillion or 80 percent of P3.077 trillion. Broken down, releases to government departments reached P2.32 trillion, equivalent to 88.2 percent of this year’s program of P2.64 trillion.
Debt Service will likely become a “greater burden” for many emerging economies, including the Philippines, as overall spending will stay high and state revenues remain under pressure, the Institute of International Finance (IIF) said. IIF data showed the share of government interest expense over their overall revenues will increase the most in the Philippines among 15 emerging markets studied. The ratio is projected to jump by nearly six percentage points in 2021-2022 from the level in 2018-2019.
The Philippines expects a bulk shipment of Pfizer's COVID-19 vaccines to arrive in the country before the month ends, vaccine czar Carlito Galvez Jr. said. He added that the delivery of 2.2 million doses of the American-made vaccines will be facilitated by COVAX, a global initiative led by the World Health Organization, vaccine alliance Gavi, and the Coalition for Epidemic Preparedness Innovations.
The Philippines has expanded the coverage of the currently implemented travel ban to include Oman and the United Arab Emirates amid threats imposed by the double mutant variant first detected in India. Meanwhile, ban on the entry of travelers coming from India, Pakistan, Nepal, Bangladesh and Sri Lanka is extended until end of May.
The Greater Manila Area - also known as NCR Plus - will be under general community quarantine "with heightened restrictions" until May 31, Roque said. These restrictions include allowing only essential travel into and out of NCR Plus. Public transportation will also be available at certain capacities set by the Transportation Department.
As of April 15, the DBM said in a statement on Tuesday that P646.97 billion was released under two Bayanihan measures while P6.46 billion was released for various programs, activities and projects in line with government’s Covid-19 response upon the expiration of Bayanihan to Heal as One Act (Bayanihan 1).
Some of the government’s big-ticket projects under the Build, Build, Build (BBB) program failed to deliver when it comes to generating economic growth in the country, Malacañang acknowledged, but traced this to the disruptions caused by existing restrictions for the entry of foreigners. However, he noted that even after the Inter-Agency Task Force for the Management of Emerging Infectious Diseases (IATF) eventually relaxed the travel restrictions, half of the concerned foreign consultants refused to enter the country due to concerns over the rising numbers of local Covid-19 cases.
Mr. Duterte placed the Philippines under a state of calamity for one year due to the spread of ASF, Presidential Spokesperson Herminio “Harry” L. Roque, Jr. told a televised news briefing. In Proclamation No. 1143 signed on May 10, Mr. Duterte said the hog disease has spread to 2,571 barangays in 46 provinces across 12 regions since its presence was first reported in the country in 2019, with new cases being reported despite the government's efforts.
The Philippine economy may have to grow by at least 10.1% in the remaining three quarters to reach the lower end of the 6.5-7.5% full-year target, the National Economic and Development Authority (NEDA) chief said after gross domestic product (GDP) shrank in the first quarter. Socioeconomic Planning Secretary Karl Kendrick T. Chua earlier on Tuesday said the seven-week long lockdown in Metro Manila and adjacent provinces pose a downside risk to the government’s growth targets for 2021, even as the overall impact was likely less as restrictions were slightly eased compared with last year.
The Department of Labor and Employment is already running out of funds to support workers affected by the pandemic, Assistant Secretary Dominique Tutay said. She added that the department is now using its regular budget as the allocated funds for displaced informal workers under Bayanihan 2 have already been used. Tutay said over a million workers in the informal sector have already received support. Meanwhile, 1.25 million formal workers and 500,000 OFWs have so far benefited from DOLE's programs.
In a press statement on Wednesday, the investment promotion agency said it gave the go signal to 57 projects worth ₱25.382 billion — 53.8% higher than the amount in the first quarter last year. The approved investments are expected to generate around 5,601 jobs. The bulk of the projects will be situated in Luzon at 43, followed by 10 in Visayas and 4 in Mindanao.
Fitch Solutions has downscaled its economic growth forecast for the Philippines this year to 5.3% from its previous 5.8% figure as the country continues to deal with the raging COVID-19 pandemic. The revised figure, like the preceding forecast, also falls below the government’s 6.5-7.5% target band for economic growth this year.
BSP data showed that bank lending in March hit a contraction of 4.5 percent, falling faster than the 2.7- percent contraction seen in the previous month. The BSP said the already weak appetite of banks to lend was further strained by the reimposition of restrictions to curb the rising Covid-19 cases in key areas in the country.
The leadership of the House of Representatives and the President’s economic team will meet anew on Wednesday (12 May) to iron out the differences in the proposed Bayanihan to Arise As One Act or the Bayanihan 3. House Committee on Ways and Means Chairman Joey Sarte Salceda said they will tackle both the spending side and the revenue side of the proposal.
The chief implementer of the government’s national policy on Covid-19, Carlito G. Galvez Jr., said the government is looking to deploy over 25 million doses of Covid-19 vaccines in the next two months. The government is eyeing to vaccinate 58 million to 70 million Filipinos this year to achieve “herd immunity,” wherein most of the country’s population will be inoculated, therefore also protecting those who are not yet given the vaccine. Currently, the government has 7 million doses of Covid-19 vaccines.
In a statement, the PSA said the value of production in the agriculture sector at constant 2018 prices dropped by 3.3% in the January to March period, lower than the -1.7% a year ago. However, this was still a slight improvement from the -3.8% posted in the fourth quarter of 2020. At current prices, the value of agricultural production went up 8.2% to P484.8 billion in the first three months of 2021. Livestock production, which accounts for 14% of the agriculture sector’s output, slumped by 23.2%.
The DOE has partnered with the World Bank Group and the UK Embassy to develop specific policies and regulations for offshore wind projects, DOE-Renewable Energy Management Bureau (REMB) director Mylene Capongcol said. The agency held a kick-off meeting with the World Bank Group and the UK Embassy last Thursday.
National Statistician Dennis Mapa reported Tuesday an economic contraction of 4.2% for the period, milder than the 8.3% plunge recorded in the last three months of 2020 and steeper than the 0.7% drop from January to March last year. The latest figure marks the fifth straight quarter of annual economic decline for the Philippines. According to the Philippine Statistics Authority, the longest period of negative gross domestic output for the country covered nine consecutive quarters: from the fourth quarter of 1983 to the last quarter of 1985 under the administration of former President Ferdinand Marcos.