The economy has to move. It has to move forward.
“The first step towards getting somewhere is to decide you’re not going to stay where you are.” J.P. Morgan.
J.P. Morgan was a famous American financier and industrial organizer known for restructuring businesses to make them more profitable and stable.
He reorganized several major railroads and financed industrial consolidations such as the United States Steel, International Harvester and General Electric corporations.
The economy has to move. It has to move forward.
Ph Economy 2021
There is so much negativity in this December air, and it is high time it turns around and brings in the energy that will create a much better 2021 than a dreadful 2020.
What will it be in 2021 for the Philippine economy?
This question is undoubtedly on everyone’s mind now.
The Christmas season does not only feel different or look different. It is different.
Picture These…
Consider the following narratives on the economic side.
Around 10.9 million Filipino workers lost their jobs and had lower incomes and working hours this year as the COVID-19 pandemic affected the economy. Two thirds or 7.2 million of the 10.9 million vulnerable Filipino workers may be “displaced” as the Philippines shifts towards online.
“The impact of the crisis has been far-reaching, with underemployment surging as millions of workers are asked to work reduced hours or no hours at all,” said the International Labor Organization in a report.
Official unemployment data in the Philippines reported 3.8 million jobless Filipinos as of October, on the back of persisting effects of the pandemic.
Economy Slows Down
With the economy slowing down, people lost jobs, with some completely giving up finding one.
The jobless rate surged to a record high of 17.6 percent in April, before declining to 10 percent in July and 8.7 percent in October.
Joblessness was so severe that many just stopped looking for work.
High-risk sectors with most displacements workers include manufacturing, transportation and storage, accommodation and food service activities, arts, entertainment, and recreation.
Recession ‘Til 2021
Nomura, a Japanese investment bank, expects a slower economic rebound for the Philippines next year from the pandemic’s impact.
In a report, Nomura said the Philippines’ gross domestic product (GDP) would recover at a slower growth of 6.8 percent instead of 7.1 percent next year after contracting by 9.8 percent this year.
According to Dutch financial giant ING Bank, the Philippine economy continues to lose steam and could remain in recession until 2021 amid the raging COVID-19 pandemic.
It predicts that there is a slim hope for a big turnaround for the Philippines in 2021.
Philippines’ gross domestic product contracted by 10 percent from January to September. It notes worrisome trends for consumption, capital formation, and government spending.
These trends are not likely to change quickly, even as lockdown restrictions are relaxed.
Focus On The ‘Unbanked’
ING Bank sees remittances from overseas Filipino workers dropping between five and 10 percent this year, resulting in a decline of up to $3.1 billion in 2020 and 2021.
The decrease in OFW remittances will result in slower household spending.
Financial institutions are coming to the rescue.
The country’s top financial regulator, the Banko Sentral ng Pilipinas, wants financial inclusion initiatives to bring not just so-called “unbanked” individuals into the formal economy and small businesses and entrepreneurs who have restricted access to bank loans.
Recovery Efforts
Also, on the financial side, the Bureau of the Treasury (BTr) has set a P140-billion borrowing program for January 2021, higher than in the previous month, P80 billion via Treasury bills (T-bills) and P60 billion from Treasury bonds (T-bonds) next month.
Manila-based Asian Development Bank is reserving over P9 billion in loans to the Philippine government in the next three years.
This fund will help revive the economic growth devastated by the coronavirus pandemic. It will focus on infrastructure and health projects.
We are getting mixed signals. But they point to preparations to get the recovery effort up and running from day 1 of 2021.