Philippines shows signs of recovery – DOF

MANILA, Philippines — The government should continue the calibrated easing of lockdown measures to further spur the recovery of the trade sector and ultimately the entire economy, according to the Department of Finance (DOF).

In an economic bulletin, Finance Undersecretary Gil Beltran said the economy continued to show signs of recovery amid easing quarantine measures as shown by the country’s trade numbers in October.

He said merchandise trade declined by only 12.6 percent year-on-year in October, an improvement from the dramatic 59.5 percent plunge in April, when Luzon and different parts of the country were placed under tighter mobility restrictions.

Beltran also said that the country’s exports followed the same trend. Exports nosedived by  nearly 50 percent in April, but managed to contract by only  2.2 percent in October.

Imports in October also bounced back as it dropped by 19.5 percent year-on-year, coming from a disappointing 65.3 percent contraction in April.

Beltran said the recovery in trade was also seen in the Purchasing Managers’ Index of the manufacturing sector, which settled at 48.5 in October, up from 31.6 in April.

“Recovery is not smooth, however. September numbers for merchandise trade and PMI are better than in October,” Beltran said.

In September, merchandise trade slid  by 8.2 percent, lower than the 12.6 percent posted in October, while the PMI was recorded at 50.1.

“As long as lockdowns are in place, there will be hesitation on the part of consumers and investors to behave like they did before March,” Beltran said.

So while the Philippines is awaiting the arrival of a vaccine, Beltran said the government should continue the “prudent, calibrated reopening of key sectors of the economy.”  He said this would be the key to the recovery of the economy in general, and trade, in particular.

Beltran said the Philippines should also continue to adopt economic reforms to attract more investments.

“The recent passing of CREATE and FIST in the Senate are welcome and will help in decreasing the burden on businesses once signed into law,” he said, referring to the Corporate Recovery and Tax Incentives for Enterprises and Financial Institutions Strategic Transfer bills.

He said the approval of the Passive Income and Financial Intermediary Taxation Act, as well as proposed amendments to the Public Service Act and Retail Trade Liberalization Act, would also help the country overcome the challenges brought about by the coronavirus pandemic.

“Furthermore, improvements in ease of doing business will also be important in adapting to the new normal,” he said.