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Philippine economy shrinks record 9.5% in 2020

·2-min read
Philippine economy shrinks record 9.5% in 2020

The Philippine economy shrank a record 9.5 percent last year, official data showed Thursday, after coronavirus measures devastated the retail and tourism sectors while a series of natural disasters wrecked crops.

But Acting Socioeconomic Planning Secretary Karl Kendrick Chua said the outlook for this year was "encouraging" as measures introduced to contain the virus are eased further and the country prepares for a vaccination drive.

"We will see more economic activity in the months ahead," Chua said.

"This will lead to a strong recovery before the end of the year when the government will have rolled out enough vaccines against Covid-19 for a majority of our people."

Gross domestic product shrank for four straight quarters in 2020, the Philippine Statistics Authority said.

The full-year figure was the worst since records began in 1946 and ended more than two decades of annual growth.

Accommodation and food services were among the sectors hardest hit by lockdowns and other measures that left millions jobless.

A series of typhoons and a volcanic eruption in the natural disaster-prone country also destroyed cash crops.

Chua warned a more robust recovery was being hampered by stay-at-home orders for children, which were preventing families visiting shopping malls -- the centres of community life and consumer spending in the Philippines.

Earlier this week President Rodrigo Duterte overturned a decision by his coronavirus task force to lift the restriction on children aged 10 to 14.

"Economic growth will be hard pressed to make a stronger recovery if children and families are restricted from participating in the economy as up to 50 percent of non-essential retail sales are driven by family spending," Chua said.

Once those and other measures were further relaxed, "we see no reason why the economy cannot bounce back", he added.

Last year "will be remembered as the most difficult year in our lives", Chua said.

"The road ahead remains challenging but there is now light at the end of the tunnel."

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