The Philippines’ economic recession has become a concerning topic for the past few years. It is an issue
that does not only affect the counties economic state and the lives of its citizens, instead, it is a
widespread problem that hinders global prosperity and negatively affects nations’ economies.
Particularly in the Philippines, the economic downturn rooted even before the COVID-19 pandemic has
struck the country. According to the Philippine Statistics Authority (2023), on a published article for the
2022 Statistical Indicators on Philippine Development (StatDev 2022), the growth rate of the county’s
Gross Domestic Product (GDP) was significantly lower in 2019 with 6.1%, previously coming from the
6.7% in 2017.
In the course of the pandemic, there is also a significant decrease in the Gross National Income’s growth
rate from the 5.2% in 2017 as it reaches rock bottom to a negative growth rate of -12.7% in 2020. The
pandemic plays a critical role in the further sinking of the Philippines’ already impaired economy. This
event prompt to a limited economic mobility where a lot of establishments and business were forced to
closure, for reasons such as: business owners faced a funding gap during the quarantine, they were
having a hard time complying to the requirements to continue operating, and there is a set maximum of
people who are allowed to enter one establishment. Which therefore lead to people losing their jobs,
and consumers spending less to contribute to the economy. The unemployment rate of the Philippines
skyrocketed to 10.3% in 2020 (Philippine Statistics Authority, 2023). Moreover, there is also an observed
decrease in the remittances of the 1.77 million Overseas Filipino Workers (PSA, 2022) in 2020 where it
dropped by 0.8% (Statista, 2023).
From January to September 2020, the services sector experienced a 9.5% drop as food service
operations, transportation, housing, and lot ownerships declined as a result of the impeded operations
during the imposed lockdown in the country. Hotels, restaurants, and other services, with the exception
for some that were converted by government as quarantine facilities for returning OFWs, in accordance
with the required community quarantine guidelines, as well as a shortage of clients as the country also
blocked its doors to tourists. Tourism is also one of the major contributors in the Philippines’ economy
however by the end of April 2020, all countries in the world had imposed some travel restrictions
according to United Nations-World Tourism Organization (UNWTO), therefore, limiting the mobility of
the travelers that is going in and out of the country’s territory. The Department of Tourism (DOT) claimed
that an estimated 4.8 million Filipinos in the tourism industry has been harmed as a result of job losses.
The country's healthcare and social services also suffered as a result of the economic downturn. Due to
the pandemic, the healthcare sector experienced a rise in demand, resulting in medical supply shortages
and overwhelmed healthcare institutions. Furthermore, as the crisis squeezed country’s budget to its
limits, the government struggled to offer social services to the unemployed and vulnerable people.
Therefore, recording an average of 1,677 lives lost per day in 2020 (PSA, 2022). These difficulties
emphasized the importance of improving healthcare facilities and services in the Philippines.
In the present, the government took several steps to revive the country’s economy. One of which is
collaborating with other nations to encourage investors to invest in the Philippines’ agriculture and
manufacturing market. President Ferdinand “Bongbong” Marcos Jr. told foreign investors during the 10th
Asian Summit in Singapore “We are a nation on the rise, ready to collaborate with partners who see the
potential that we hold in the Philippines. Our journey towards a digital future is in full swing. The
Philippine tech ecosystem is thriving, marked by dynamic startup culture and advancements in e-
commerce”. By collaborating with international organizations like The International Monetary Fund and
World Bank can also spreadhead the country’s recovery.
To successfully revive tourism, the government, in collaboration with the travel and tourism sector, has
been implementing tourism recovery plans, as the government must reestablish tourist trust while
encouraging innovation and investment for a strong and profitable tourism industry. The DOT and the
Department of Labor and Employment (DOLE) signed a Memorandum Circular to provide financial
assistance to displaced workers in the tourism industry.
The Department of Finance (DOF) and International Monetary Fund (IMF) both agree on the importance
of spending reduction and increased revenue utilization through high-quality, high-yielding tax reforms.
To avoid additional inflationary pressures, the secretary of finance, Benjamin Diokno, points out the
significance of examining the timing and pace of implementing tax reforms.
To summarize, the Philippines' economic recession has been a complex problem with severe
repercussions. Even before the COVID-19 pandemic, the country was dealing with slowing GDP growth
and a variety of economic vulnerabilities. The pandemic contributed to these problems, resulting in a
significant slump in the economy, widespread job losses, and a drop in remittances from Overseas
Filipino Workers (OFWs). These challenges have had a significant impact on Filipinos' lives, the country's
healthcare and social services, and the country's overall economic stability. The government has
implemented an intricate response in facing this economic crisis. It has implemented fiscal and monetary
policies to assist businesses and individuals in meeting their financial obligations. Furthermore, there has
been a focus on broadening the economy by promoting investment in order to increase resilience to
external economic fluctuations. Collaboration with organizations such as the International Monetary
Fund (IMF) and the World Bank has also been critical in assisting with the recovery process. Despite the
worldwide financial crisis, the government prepared an action plan: The Philippine Development Plan.
The path to recovery may still be difficult, but with unified efforts, effective regulations, and partnerships
with other nations, the Philippines has the potential to overcome the economic recession and build a
more resilient and prosperous future for its citizens.
Sources
PSA releases the 2022 Statistical Indicators on Philippine Development | Philippine Statistics Authority |
Republic of the Philippines
Philippines: OFW cash remittances 2022 | Statista
2020 Overseas Filipino Workers (Final Results) | Philippine Statistics Authority | Republic of the
Philippines (psa.gov.ph)
Registered Deaths in the Philippines, 2020 | Philippine Statistics Authority | Republic of the Philippines
(psa.gov.ph)
Navigating a Challenging Recovery in the Philippines (Philippines Economic Update June 2021)
(worldbank.org)
IMF: PH’s post-pandemic economic recovery, driven by sustained reforms and sound macroeconomic
policies - Department of Finance (dof.gov.ph)