Essay: Philippines: Economic Growth, Challenges, and the Impact of COVID-19

The Philippines is currently a developing country and is historically belongs to third world countries. Our country is rich in human and natural resources, yet it remains poor. An article by Ventura (2020), shows the list of the world’s richest and poorest countries in 2020. Among all 191 countries, the Philippines ranks 116.
The World Bank imparted that in the first half of 2019, the economic growth of the Philippines has already slowed because of the decrease in investment growth. Poverty reduction which involves having development on the living conditions of people and has the intentions to raise them from poverty will lead to progress if there will be an improvement to the condition of the labor market and supported development to household incomes. Private consumption or personal consumption expenditures that measure the spending of goods and services was the principal development driver. Due to the macro external factors, domestic challenges, and rising worldwide vulnerabilities, the economic growth slowed to 5.8% in 2019 but it is projected that it will recover to 6.1% in 2020 and 6.2% in 2021.
Philippines in the East Asia Pacific region is considered as one of the most dynamic economies which is embedded in strong consumer demand. It has been stated that the growth momentum was reinforced by the globally recognized competitive workforce and sound economic fundamentals. Moreover, the nation’s economic growth will reach the upper-middle-income country if the average annual growth is sustained.
According to AVPN, the abnormal condition of the Philippine economy was caused by low financial versatility, neediness and pay disparity, lack of access to health care and education, and natural corruption. These are the key difficulties that the Philippines is looking for in its improvement.
Last December 2019, a new coronavirus that has their origins in bats has been reported in Wuhan, China and has rapidly spread worldwide. January 2020, when it was confirmed that there was already a reported case here in the Philippines. While February 2020 when the World Health Organization (WHO) officially named this disease referred to as the 2019 novel coronavirus and abbreviated as COVID-19. The virus is exceptionally infectious that it quickly spreads and ceaselessly develops in the human populace and March 2020 when it was declared that this virus caused a global pandemic
Before the Covid-19 pandemic, it is evidently expected that our national economy will be certainly affected by it. Governments imposed community quarantine measures that would mitigate the pandemic which for instance, nationwide lockdowns. In an adverse manner, the livelihood of the populace was strongly affected by it. Consequently, it will cause drastic changes in terms of employment levels significantly several people would lose their jobs and it would cause a major impact on our country’s different sectors.
Specifically, August 19, 2020 is when the government declares general community quarantine, particularly in Manila. This allows businesses to reopen and transportation resumes. There are still travel restrictions and limited capacity for domestic flights. Schools also reopened which make students undergo online classes.
In general, the COVID-19 pandemic extremely caused different challenges in the nation’s economic growth. Sharp slowdowns in tourism and exports resulted to significant declines in consumption and economic growth. With travel being a major contributing factor to the spread of the virus, it has brought a grinding halt to the tourism industry worldwide. The global pandemic has caused so much influence on our country’s economic condition as well as extreme destruction to the lives of people. Low-pay laborers, frequently transients, and even people living in exceptionally rich countries unexpectedly got themselves jobless, destitute, and abandoned. Government-imposed national lockdowns have adversely affected the livelihoods of citizens. Between March and April 2020, with only a few exceptions, the country’s Luzon Island went into a complete lockdown that limited population movement. This resulted in a dramatic drop in employment levels, with estimates indicating that due to the lockdown, a maximum of one million people had lost their jobs. In addition, at the very least, the enforced community quarantine caused cumulative gross value-added losses of three billion Philippine pesos in every selected main sector in the country.
As a result of the flare-up of the COVID-19 pandemic, the assessed decrease in the Gross Domestic Product (GDP) came about to 8.3%. In any case, it is normal that the GDP development will take to 7.4% in 2021, as per IMF’s October 2020 estimate. The country has been stuck in a low-growth trajectory. It is headed for a low steady-state level of output per worker, which explains its slow rate of long-term growth. Most significantly, its total factor productivity, at 20.9 percent of that of the U.S., is horrendously low, which explains its low convergence point.
Monetary market unpredictability has died down as of late, with the Peso/ US Dollar swapping scale remaining stable. Then, genuine GDP in the initial 3/4 of 2020 shrunk by 0.7 percent, 16.5 percent, and 11.5 percent separately, on a year-on-year premise. All things considered, monetary development is required to bounce back progressively in 2021-2022 expecting a control of the infection locally and around the world, and with more vigorous homegrown movement supported by the more prominent shopper and business certainty and the public speculation energy
To conclude wit, the economy is required to bounce back in 2021 as the flare-up is contained, the economy is additionally opened, and greater government improvement measures are executed. Drawback chances one year from now incorporate a slower than anticipated worldwide recuperation that could weigh vigorously on an exchange, venture, and abroad Filipino specialist settlements.