The Philippines Spirals into Recession Following Months-Long Lockdowns

As health workers struggle to cope with the influx of patients, more than 27 million people in Manila and four surrounding provinces on the main island of Luzon — which accounts for more than two-thirds of the country's economic output — went back into a partial lockdown for two weeks on Tuesday to help ease the strain on hospitals.

Read also: Lockdown in the Philippines Reinstated as Health Workers Warn of a Losing Covid-19 Battle

But President Rodrigo Duterte, who was reluctant to tighten restrictions after millions lost their jobs in the first shutdown, has warned the country cannot afford to remain closed for much longer.

Businesses have been wrecked and millions of Filipinos have been forced out of work as the national government forged ahead with measures to contain the disease.

"The problem is we don't have money anymore. I cannot give food anymore and money to people," Duterte said Sunday.

The country's economic woes have been exacerbated by a drop in remittances from the legion of Filipinos working abroad who typically send money to their families every month, which fuels consumer spending — the main driver of growth.

Remittances dropped 6.4 percent in the first five months, compared with the same period last year, according to the central bank.

Thousands of seafarers, cleaners and construction workers have lost their jobs and returned home.

Consumer spending in the second quarter plummeted 15.5 percent, the statistics agency said.

"It will be a rough road to recovery as trade-offs between economic recovery and health will remain a big challenge to both the private and public sectors," said Emilio Neri, lead economist at Bank of the Philippine Islands.

(Writers & Editors: MFF/AMJ/DAN, Agence France-Presse) 

Source: http://u.afp.com/3B69