The gross domestic product (GDP) dipped 0.2 percent in the first quarter as the economy shrank after more than two decades due to the COVID-19 pandemic.
Officials projected the economy to worsen as the country battles the global pandemic.
The GDP last dipped in 1998 during the Asian financial crisis as the Philippines report devastating figures as a result of widespread lockdowns that shut down the economy.
According to National Statistician Claire Dennis Mapa, the 0.2 percent contraction was the first decline since the minus 3 percent GDP recorded in the fourth quarter of 1998.
Karl Kendrick Chua, Socio-economic Planning Acting Secretary, said such decline remains modest compared to other countries. “If I compare this to 2009 and 1998, the magnitude of the impact, suggests this small decline is actually respectable. Compared to other countries, we are in a better footing,” Chua said.
Presidential spokesman Harry Roque said the poor first quarter figure was regrettable “but we’re glad it’s a minimal contraction given that the enhanced community quarantine (ECQ) was imposed in the first week of March.”
“We have very sound economic fundamentals as evidenced by good credit rating and a strong peso despite the ECQ. We expect the economy to shrink even more during the month of April,” according to Roque.
Chua foresees the economy to make a turnaround in June and “by the end of the year, we will have a respectable performance.”
He added such decline in the first quarter may be attributed to the Taal volcano eruption, the COVID-19 pandemic and the sharp drop in trade and tourism for February and March. For the whole year, Chua said government will stick with the Development Budget Coordination Committee’s latest preliminary projection of 0 to -0.8 percent growth and revision for such will come depending on future sets of data.