The Philippines officially entered into a recession in the second quarter in a bombastic manner as the Philippine Statistics Authority reported the plummet of gross domestic product (GDP) 16.5 percent year-on-year from April to June.
The latest data indicates that the local economy, once the darling of investors in the region, has officially sank into recession which is defined by two succeeding quarters of negative GDP growth. The last recession recorded was from the second to third quarter of 1991 when the Gulf war crippled oil supply and pushed up global oil prices.
However, this second quarter contraction that captured the full impact of one of the longest and strictest lockdowns in the planet, is so massive that it marks the biggest nosedive in economic performance under democratic rule. The latest data is the worst since available records dating back to 1981.
The depressing trend in the economy is not all unique to the Philippines but unlike our neighbors Thailand and Vietnam which have slowly reopened their economies, we are shutting down Metro Manila and other key areas in Luzon for another 15 days starting August 4 due to the inability of the government to control the spike in coronavirus disease 2019 cases despite resorting to military-inspired lockdowns.
Although part of the famed Filipino resiliency is our tendency to hope for the best, but expect the worst, this massive economic contraction that many would have considered preventable had our circumstances been slightly different still comes as a shocking dose of reality with regard to our past, present and future situation.
At this point we can only hope that our government still has a plan to get the country out of this rut and those responsible and accountable aren’t counting on the COVID-19 pandemic to bail them out of the poor decisions that led our poor but once hopeful nation where it is today.
Recessions and economic contractions are a fact of life for most countries in the globe as humanity deals with the ravages of COVID-19. The intensity and length of those recessions and the path to recovery will depend on the quality of leadership and the Philippines will need significant improvements at that particular requirement if we are going to face the future with optimism.*