Business activities in various sectors of the economy have started to pick up since the economic standstill during the second quarter of this year triggered by the 11-week Luzon-wide enhanced community quarantine (ECQ). The gradual and phased recovery is occurring despite continued mobility restrictions designed to curb the spread of the coronavirus disease 2019 (COVID-19), the Department of Finance (DOF) has learned from industry leaders.
In a series of meetings held during the 3rd week of July with industry leaders, Finance Secretary Carlos Dominguez III and other officials from the economic cluster sought the private sector’s feedback on the status of business operations and for advice on how the government could help restore consumer confidence.
The private sector leaders reported that construction has resumed, with one major property builder slowly restarting 78 projects and another conglomerate reporting that their infrastructure investments largely remain on track, the DOF said.
Mall owners in areas under the relatively relaxed general community quarantine (GCQ) and Modified GCQ (MGCQ) reported foot traffic returning to 24 to 30 percent compared to regular operations, but with sales still sluggish as of June. Mall purchases were mostly food, household items and gadgets.
The National Capital Region (NCR) and the nearby provinces of Laguna, Cavite, Bulacan and Rizal have been under GCQ since June 1. To further boost the capacity of the healthcare system amid rising COVID-19 cases, the President reverted these areas to modified ECQ (MECQ) starting midnight of August 4 up to August 18.
In June, real estate businesses reported an increase in the sale of residential units of up to 60 percent.
Land developers report that business process outsourcing (BPO) companies have asked for additional office space for their employees, in compliance with physical distancing plus other health and safety protocols.
The telecommunications, water and energy sectors, meanwhile, expect positive sales growth this year despite the pandemic.
Most firms reported that they have begun to see a gradual sales recovery in June, coinciding with the partial reopening of the economy under GCQ, and expect a slow reduction of losses in the coming months, after the end of the MECQ on August 18.
A major private sector lender reported a rise in consumer loans except for automobile loans, and a surge in loan demand mostly from large firms.
Hotel operations have resumed in both GCQ and MGCQ areas but only for a limited number of bookings, such as for long-staying guests, returning overseas Filipinos and stranded passengers.
One major fast food chain has reopened 93 percent of its stores nationwide, but sales have remained below normal because of existing mobility restrictions.
Port operations, meanwhile, have reached a 60 percent utilization rate as of June.
Liquor sales increased by up to 34 percent in the 1st half of 2020 despite the lockdown and higher excise taxes imposed starting January this year under the new “sin” tax reform law.
Among the recommendations from private sector leaders were the easing of transportation restrictions, subject to health and safety protocols, to allow the movement of more workers and consumers.
The fourth quarter is a crucial period to shore up demand and consumer confidence, they added.
Dominguez confirmed these findings during the July 31 meeting of the Inter-Agency Task Force for the Management of Emerging Infectious Diseases (IATF) with President Duterte.
“The economy actually is already beginning to recover. Our estimate is that we hit already the lowest parts of the economy which was in April and May. These were the lowest points,” Dominguez said during the televised portions of the meeting.
“We have to encourage people also to start spending so that the economy can start picking up,” he said. Economic managers and health officials have repeatedly underscored that strict compliance with health and safety measures, such as wearing of masks, frequent hand washing, and social distancing, greatly reduce the risk of infection.
Dominguez said that, among others, the Philippines’ low inflation rate, ample liquidity in the economy, and stable peso, which is currently one of the strongest in Asia, have placed the country “in good shape to overcome the COVID-19 crisis.”
He said that strict quarantine measures were put in place by the government starting March 17 in step with the President’s priority of saving lives and protecting communities from the pandemic.
These lockdowns also gave the government time to beef up the capacity of the healthcare system to deal with the contagion and to significantly expand its capacity to isolate infected individuals, he added.
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