NEDA sees strong growth in Q2, but recovery limited by 'artificial' economic barriers

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Metro Manila (CNN Philippines, June 15) – Economic Planning Secretary Karl Chua said the Philippine economy will finally post growth this quarter, but it's still not a sign of a convincing rebound more than a year since the COVID-19 pandemic began.

"We allowed most sectors to operate, we allowed transportation to continue, our curfew does not apply to workers. All these suggest a strong positive growth. But to sustain it, we have to do more in the vaccination and the management of risks, and spending all our programs in an accelerated way will be going to help," Chua told the EJAP Economic Forum on Tuesday.

Local output has collapsed for five straight quarters since the health crisis broke out. Last year, the economy shrank by 9.6%. President Rodrigo Duterte's economic team targets a 6-7% growth this year, even though the first three months saw a 4.2% contraction.

Chua added that the country can only return to its pre-pandemic state in 2019 during the last six months of 2022 as existing restrictions constrict growth prospects. 

"Stimulus actually works if the economy is allowed to operate, but if you close the economy or artificially don't allow it to operate - prevent half of the economy including families and their children from going out - then no matter what money you put or pump prime, they will not be able to fully help," Chua said.

The NEDA chief has been aggressively lobbying to scale down wide lockdowns and to allow children to head out and return to physical classrooms, which he wants to start by August. However, this has been met with apprehension among teachers, parents, and students who still fear for their safety amid a slow vaccination rollout.

"In a demographic profile where the median age is 24 - meaning half of the people are below 24 and 40% are below 18 - then we have a problem when they cannot go out," Chua said, adding that no other country forced children to stay indoors for over a year and counting.

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So far, only those aged 18-65 are allowed outdoors. Senior citizens who have received two doses of a COVID-19 vaccine and are carrying their vaccination cards with them are exempted from this rule.

Business groups earlier said they anticipate the further easing of quarantine protocols.

Financial Executives Institute of the Philippines President Francis Lim wanted looser restrictions for Metro Manila and the rest of NCR Plus, as these areas "account for a substantial part of our economy."

He said mass vaccination is key. "This is the quickest way to open up our economy as amply demonstrated in other countries," Lim added.

READ: Duterte's economic team sees slower growth in 2021​, wider budget gap 'concerning'