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DOF Chief: Philippines Has Resources to Endure Coronavirus

  • The Philippines has resources for a “protracted” battle against the pandemic and its effects on the economy, which contracted by a record in the second quarter.
  • The nation’s “unique fiscal and macroeconomic strengths” going into this year provide it with a “solid footing” to meet the pandemic’s economic challenge, the DOF Chief said in a statement.
  • Despite the recent lockdown, after the gradual reopening of businesses since May, economic recovery in the third quarter will continue at a “steady, yet moderate” pace, Dominguez said.
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According to Finance Secretary Carlos Dominguez, the Philippines has resources for a “protracted” battle against the pandemic and its effects on the economy, which contracted by a record in the second quarter.

The nation’s “unique fiscal and macroeconomic strengths” going into this year provide it with a “solid footing” to meet the pandemic’s economic challenge, Dominguez said in a statement.

“We have the resources necessary to endure this challenge, but we must also conserve our resources for succeeding rounds of this fight,” Dominguez says. “Government’s ability to sustain the fight depends on our fiscal stamina.”

After declining 16.5 percent in the second quarter, the Philippines fell into a recession as consumer spending and employment were pounded amid the lockdowns in Manila and other urban centers to contain the coronavirus. Rising infections pushed the government to reinstate restrictions for two weeks in the capital region and four neighboring provinces on Tuesday.

Fitch Ratings Associate Director Sagarika Chandra said in a statement that the near-term growth outlook for the Philippines has continued to deteriorate amid the pandemic and lockdowns. Due to the country’s difficulty in containing the virus, “downside risks are materializing”.

Despite the recent lockdown, after the gradual reopening of businesses since May, economic recovery in the third quarter will continue at a “steady, yet moderate” pace, Dominguez said. The restriction is optimistic in the long term because it gives the government time to improve health-care resources and control virus spread, he added.

“Benign” inflation, a strong peso, and a high-investment-grade credit rating that enabled the government to borrow money at relatively low cost will help it “mount a strong recovery soon enough,” Dominguez said.

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[Bloomberg]

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