FACT FILE 2020 1

FACT FILE 2020

Economic Impact
of Covid-19
in the Philippines
FACT FILE 2020:
Economic Impact
of Covid-19 in the Philippines

BTIPR EDITORIAL TEAM

DIRECTOR MARIA LOURDES A. YAPTINCHAY Editorial Adviser

ASSISTANT DIRECTOR ABIGAIL R. ZURITA Editorial Adviser

MA. THERESA G. FAUSTINO Editor-in-Chief

ROSALIE B. ABRERA Associate Editor
JERICA T. ORTEGA Researchers/Writers
ROMINA GRACE G. VERA
ROSA CARMINA G. FAJARDO
MAY ANGELI V. TAYONA
SYMON ELLI R. BLAS

SAVYNA IAN T. LALO Graphic & Layout Designer

Contents

I. Economic Impact of COVID-19 in a Nutshell 1

II. Performance of Major Economic Indicators 9

III. Trade and Industry-Related Government Interventions 19

IV. Economic Outlook 21

1 ECONOMIC IMPACT OF COVID-19 IN THE PHILIPPINES

I. Economic Impact of COVID-19 in a Nutshell

The COVID-19 pandemic has caused Figure 2 Growth Rate by Sector (in percent)
major disruptions in global economic
10.00
activities and has continued to pose
5.00
a threat to both lives and livelihoods 0.0
across the globe. The Philippines Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3
has implemented varying levels of -10.0 2017 2018 2019 2020

restrictions and quarantine rules -15.0

nationwide since March, leading to -20.0
economic contractions in the 2nd -25.0
Agriculture, Forestry and Fishing Industry Services
and 3rd quarters of 2020. As in Source: PSA
most of the countries affected by the
pandemic, the contraction is due to the subdued
private consumption and investment, among others,
caused by heightened uncertainties in the global
economic recovery. The gradual and calibrated
reopening of the Philippine economy hopes to
forestall the gloomy growth forecasts while still
keeping public health a priority.
Production
January-September 2020 saw the Philippine economy
contracting by 10% due mainly to various quarantine
measures imposed by the government to prioritize
public health. Among the major economic sectors,
Industry bore the brunt of the lockdown, resulting
in its decline by 14.33%. Services also decreased by
9.46%, while Agriculture demonstrated its resiliency
by managing to post a positive growth of 0.81%.
Figure 1 Quarterly GDP, 2017-2020
120.00
100.00
80.00
60.00
40.00
20.00
Q1 Q2 Q3 Q4 Q1 Q2 Q3
2017 2018
GDP (US$ B) 79.2 89.0 81.4 91.0 81.9 90.0 82.1 92.7 85.1 95.5 90.3 103 87.0 81.9 84.5
Growth Rate (%) 6.4 7.2 7.5 6.6 6.5 6.4 6.1 6.4 5.7 5.4 6.3 6.7 -0.7 -16.8 -11.5
Source: PSA
Prior to the pandemic, the Philippine economy
experienced a declining growth in the last three
(3) years, from 6.93% in 2017 to 6.04 in 2019.
At an average growth of 6.44%, the Philippines
was one of the fastest growing economies in Asia
next to China (6.60%) and Viet Nam (6.97%).
Expenditure
During the pandemic, huge declines were seen in
household consumption, capital formation, imports
and exports. Only government expenditure posted a
positive growth of 12.4% on a year-on-year basis.
The same behavior was exhibited on a quarter-
on-quarter basis, with government expenditure
increasing by 51.6% in Q2 2020, which could be
attributed to the Social Amelioration Program (SAP)
implemented by the government to aid sectors most
affected by the pandemic.
10.0
In Q1 to Q3 2020, gross capital
5.0
formation declined by 38.3% from
0.0
-5.0
its level in 2019, followed by imports
-10.0
and exports which decreased by
-15.0 23.0% and 18.7%, respectively.
-20.0 The declines were attributed to the
Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3
closed borders which resulted in
2019 2020
disruption to global trade in goods
and services as trading partners

1  https://www.adb.org/sites/default/files/linked-documents/54138-001-sd-03.pdf
 FACT FILE 2020 2

Figure 3 Quarterly GDP by Expenditure, 2017-2020 (in USD Billion)

80.00
70.00
60.00
50.00
40.00
30.00
20.00
10.00 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3
- 2017 2018 2019 2020

Household final consumption expenditure Government final consumption expenditure

Gross capital formation Exports
Imports
Source: PSA

implemented lockdowns to mitigate the spread of
the virus1.
Household consumption expenditure, which usually
grew at an average of 6%, sharply declined by 8.2%
during the same period. The contraction was associated
with the lockdowns and a big loss in confidence and
spending from consumers and business sectors2.
Agriculture
From the first quarter to third quarter of 2020, the
agriculture sector was the only major economic sector
that exhibited a positive growth of 0.81% despite the
difficulties brought by the COVID-19 pandemic. The
experience during the pandemic has further highlighted
the importance of agriculture in strengthening national
food security in times of crisis.
In the first quarter of 2020, agriculture posted a negative
growth of 0.3% that might be partly attributed to the Taal
Volcano eruption in January, which disrupted livelihood
from agriculture and fisheries to manufacturing and
services sectors in the region3.
Growth picked up in the second quarter at 1.6% when
the government started easing restrictions under the
general community quarantine (GCQ) and allowed
access to essential goods and services which included
agriculture-related activities4.
The third quarter recorded the agriculture sector’s
sustained positive growth at 1.2% despite the combined
impacts of the community quarantine and severe
weather conditions. The growth was attributed to
increased production of crops, particularly palay (15.4)
and corn (4.1%), which cumulatively comprised 25.5%
of the GVA for agriculture.

Table 1 Volume of Production of Major Agriculture Subsectors, 2016-2019

(Values in Million metric tons, Growth in Percent)
2016 2017 2018 2019
Value Value Growth Value Growth Value Growth
Crops 81.6 91.6 12.2 87.5 -4.4 83.3 -4.8
Fisheries 4.4 4.3 -1.0 4.4 1.0 4.4 1.3
Livestock 2.7 2.8 1.1 2.8 1.8 2.8 -1.0
Poultry 1.7 1.8 4.1 1.9 5.1 2.0 4.8

Source: PSA

2  https://www.adb.org/sites/default/files/linked-documents/54138-001-sd-03.pdf and http://ateneo.edu/sites/default/files/downloadable-files/ADMU%20WP%202020-16.pdf

3  https://www.pna.gov.ph/articles/1091423
4   https://www.bworldonline.com/timeline-what-happened-since-the-philippines-was-locked-down/andhttps://boi.gov.ph/wp-content/uploads/2020/05/GCQ-Guidelines.pdf
3 ECONOMIC IMPACT OF COVID-19 IN THE PHILIPPINES

Figure 4 Industry Sectors, Growth (%) 2017-2020 (Q3), in constant 2018 prices
50
40
30
20
10
Growth (%)

0
-10
-20
-30
-40
-50
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3
2017 2018 2019 2020
Mining and quarrying -10.3 9.6 3.8 7.0 5.5 -2.4 -1.6 7.3 3.4 14.2 -3.5 -4.0 -21.0 -22.8 -15.6
Manufacturing 5.0 8.0 11.0 8.6 6.4 7.0 4.0 3.4 5.2 2.0 0.9 4.3 -3.8 -20.7 -9.7
Electricity, steam, water & waste management 2.6 3.9 4.9 6.7 7.7 5.3 5.9 7.3 3.4 8.1 7.3 7.3 4.9 -6.4 0.2
Construction 11.7 5.6 4.7 3.8 8.7 11 14.5 21.9 5.0 -0.1 15.3 10.7 -2.9 -30.4 -39.8
Source: National Accounts of the Philippines, PSA

Industry
Industry Performance during the Pandemic, Q1-Q3
2020
The COVID-19 pandemic has had an unprecedented
impact on the Philippine economy, with the industry
sector continuing to be the hardest hit with a 14.3%
decline in its gross value added (GVA) for Q1 to Q3
2020. Most firms experienced difficulties in coordinating
supply/value chains causing shortages in raw material
supply and impediments in distribution, shipping, and
logistics leading to reductions in operations5. In addition,
quarantine restrictions and physical distancing policy
in the workplace prevented operations of factories of
certain industries while some industries had limited
operation to below 100% capacity.
The shrinking of manufacturing by 11.5% was driven by
most activities, especially the manufacture of textiles
(-40.4%); leather and related products, including
footwear (-35.0%); and, coke and refined petroleum
products (-35.0%).
Among the manufacturing activities, only the manufacture
of basic pharmaceutical products and pharmaceutical
preparations expanded (10.8%), as part of the essential
sectors addressing strong clinical need during the time
of pandemic.
However, manufacturing growth only settled at 3.2% in
2019, which is its lowest since 2009 when a contraction
was recorded at -4.8%.

Figure 5 PH Industry Sectors GVA and Share, 2017-2020 (Q1-Q3)

(in constant 2018 prices and in USD Billion)
61.6%
63.8% 62.5%
69.5
65.8 66.2

61.4%
49.6 63.4%
45.6

24.6% 25.3%
23.1% 28.6
26.1 24.8%
23.8 21.3%
20.0
10.1% 10.0% 10.2% 12.4% 15.3
10.7%
3.1% 10.4 2.9% 10.6 2.9% 11.5 8.9
3.1% 8.6 2.9%
3.2% 3.2% 3.3% 2.5% 2.1%

2017 2018 2019 Q1–Q3 2019 Q1–Q3 2020

Mining and Quarrying Manufacturing Electricity, Steam, Water and Waste Management Construction
Source: National Accounts of the Philippines, PSA

5   Assessment of the Socio-economic Effects of COVID-19 and Containment Measures on Philippine Enterprises accessed at https://www.dti.gov.ph/covid19/reports/

 FACT FILE 2020 4

Table 2 Manufacturing Subsectors, 2017-2020 (Q1-Q3) (in constant 2018 prices and in Percent)
Q1-Q3
2017 2018 2019
2019 2020
INDUSTRY 7.0 7.3 4.7 4.2 -14.3
Manufacturing 8.0 5.1 3.2 2.8 -11.5
Manufacture of food 4.9 2.8 2.4 2.8 -3.5
products
Manufacture of beverages 2.0 3.0 5.8 7.5 -23.4
Manufacture of tobacco -13.9 -12.7 14.8 16.3 -15.2
products
Manufacture of textiles -11.0 2.0 6.2 8.6 -40.4
Manufacture of wearing 0.4 0.4 12.4 13.4 -24.2
apparel
Manufacture of leather and 6.8 4.9 5.1 9.1 -35.0
related products, including
footwear
Manufacture of wood, 7.3 13.5 20.0 26.1 -11.5
bamboo, cane, rattan
articles and related products
Manufacture of paper and 6.7 15.8 1.2 1.9 -8.4
paper products
Printing and reproduction of 20.1 -5.3 15.2 18.3 -12.8
recorded media
Manufacture of coke and 11.7 17.5 -15.7 -13.9 -35.0
refined petroleum products
Manufacture of chemical and 16.3 11.1 16.2 5.4 -8.2
chemical products
Manufacture of basic -1.7 -7.4 34.1 20.3 10.8
pharmaceutical products
and pharmaceutical
preparations
Manufacture of rubber and 4.2 14.9 4.3 4.5 -19.2
plastic products
Manufacture of other non- 19.4 11.9 1.0 5.1 -27.3
metallic mineral products
Manufacture of basic metals 24.1 -4.7 13.6 18.0 -12.2
Manufacture of fabricated 53.4 6.2 6.2 6.1 -28.3
metal products, except
machinery and equipment
Manufacture of computer, 14.4 8.1 -4.3 -4.2 -11.8
electronic and optical
products
Manufacture of electrical 8.4 6.7 13.8 15.1 -23.8
equipment
Manufacture of machinery 3.9 5.3 7.6 7.5 -28.8
and equipment except
electrical
Manufacture of transport 14.6 3.7 -5.4 -0.1 -27.2
equipment
Manufacture of furniture 16.2 6.2 -17.9 -19.1 -26.9
Other manufacturing 8.0 4.2 2.1 2.5 -20.2
Source: National Accounts of the Philippines, PSA
5 ECONOMIC IMPACT OF COVID-19 IN THE PHILIPPINES

PH Manufacturing Purchasing Managers’ Index (PMI)6,

January–September 20207

The PH Manufacturing PMI registered a 50.1 index Production Index9

point in September 2020 from 47.3 in August,
signaling an expansion and stabilization of the
operating condition of firms8. The manufacturing
sector regained its strength starting in May, with
September’s index point indicating the first expansion
– surpassing the PMI stagnation point of below 50.0
– since the imposition of community quarantine (CQ)
measures beginning March 2020.
The imposition of a month-long General Community
Quarantine (GCQ) in Metro Manila, Bulacan and
Batangas, and a Modified General Community
Quarantine (MGCQ) in the rest of the country allowed
more business establishments to open.
The government’s implementation of Republic Act
(R.A.) 11032 or the Ease of Doing Business and
Efficient Government Service Delivery Act of 2018;
R.A. 11469 or the Bayanihan to Heal As One Act;
R.A. 11494 or Bayanihan to Recover As One Act; and,
DTI’s financing programs such as Small Business
Corporation’s (SBCorp) COVID-19 Assistance to
Restart Enterprises (CARES) Program, among others,
helped the manufacturing sector and the micro,
small and medium enterprises (MSMEs) to bounce
back and sustain resilience amidst the pandemic.
Value of Production Index contraction slower in
September 2020
Philippine Statistics Authority’s (PSA) preliminary
results of the Monthly Integrated Survey of Selected
Industries (MISSI) reported that the Value of
Production Index (VaPI) for Manufacturing continued
to exhibit a downtrend at an annual rate of -11.9% in
September 2020, slower than the -13.3% decline in
the previous month. The slower downturn in the VaPI
was mainly due to the improved performance of four
(4) industry groups, namely, basic metals (12.3%),
food manufacturing (11.6%), chemical products
(5.6%), and miscellaneous manufactures (1.6%).
Volume of Production Index continues to drop but
at a slower rate
The Philippines has been in varying degrees of
COVID-19 lockdown since mid-March, limiting the
movement of workers and the operations of business
such as factories resulting in the downturn of
manufacturing output.

Figure 6 PH Manufacturing Purchasing Managers’ Index (PMI), 2019-2020 (January-September)

120.00

60.00
52.1 52.3 49.7
50.00
52.3 51.9 51.5 50.9 51.2 51.3 51.8 52.1 51.4 51.7
52.1 51.9
40.00 48.4 47.3 50.1
39.7 40.1
30.00
31.6
20.00
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
2019 2020
Source: IHS Markit as cited by the Bangko Sentral ng Pilipinas (BSP)

6 PMI is a measure of the prevailing direction of economic trends in manufacturing based on a monthly survey of supply chain managers. A PMI above 50 represents an
expansion when compared with the previous month, while a PMI reading under 50 represents a contraction, and an index of 50 indicates no change.
7 PMI Report for September 2020, prepared by the Bureau of Trade and Industrial Policy Research (BTIPR)-DTI, 06 Oct 2020
8 IHS Markit Philippines Manufacturing PMI: Manufacturing sector stabilizes in September, https://www.markiteconomics.com/Public/Home/PressRelease/
c7c3e67d954b4193a668d104d37bcc6c
9 Philippine Statistics Authority’s Production Index and Sales Index (Monthly Integrated Survey of Selected Industries) September 2020, https://psa.gov.ph/
manufacturing/missi-id/163366
 FACT FILE 2020 6

Volume of Production Index (VoPI) contracted at a Ten of the 20 major industries operated at 70% or
rate of -8.4% in September 2020 – slower compared above capacity utilization rates. These are:
with the -9.0% decrease in August. The major
contributor to the slower decline in VoPI were the Textiles (86.5%) Food manufacturing
two-digit expansions observed in basic metals and (75.8%)
food manufacturing with annual increases of 14.4%
and 10.2%, respectively. Electrical machinery Leather products (74.3%)
(86.1%)
Average Capacity Utilization Rate in September 2020 Printing (84.3%) Transport equipment
increased to 67.6% from 67.2% in the previous (73.7%)
month, with the manufacture of machinery except
electrical equipment (92.0%) posting the highest Non-metallic mineral Footwear and wearing
among industries, followed by furniture & fixtures products (83.0%) apparel (71.3%)
(88.4%) and paper and paper products (86.8%).
Rubber and plastic Wood and wood products
products (82.2%) (70.4%)

Services
Services Sector Performance during the Pandemic, guidelines and due to lack of customers as the
January-September 2020 country also closed its borders to tourists.

In January to September 2020, the services sector
posted a 9.5% decline as accommodation and food
service activities (44.9%); transportation and storage
(33.8%); real estate and ownership of dwellings
(18.6%), among others, shrank due to the hampered
operations during the imposed lockdown in the
country. Hotels, restaurants, and other related
establishments temporarily ceased operations, except
for some which were identified and converted by
government as quarantine facilities for returning
OFWs, in line with the enforced community quarantine
On the other hand, financial and insurance activities
(6.8%); public administration and defense; compulsory
social activities (5.8%); and information and
communication (5.3%) recorded increases as these
subsectors remained operational amidst the lockdown.
For the period 2017-2019, the major contributors to
the service sector were: wholesale and retail trade,
repair of motor vehicles and motorcycles (17.9%);
financial and insurance activities (8.3%); and, real
estate and ownership of dwellings (6.5%).

Figure 7 Gross Value Added of Subsectors of Services, January–September 2020 (in USD Billion)
20.00
18.00
16.00
14.00
12.00
10.00
8.00
6.00
4.00
2.00
0.00
Wholesale Public
and retail Financial and Professional Real administration Human
Information Transportation health Accommodation
trade; repair estate and and defense;
insurance and business ownership Education and and and food service
of motor activities services of compulsory Communication and storage social work
vehicles and dwellings social activities activities
motorcycles activities
Q1 14.31 8.78 4.78 5.72 3.77 3.64 2.72 3.31 1.60 1.75
Q2 14.79 9.25 5.44 4.43 5.06 3.83 3.05 1.74 1.45 0.64
Q3 18.07 8.92 5.68 5.26 4.34 2.98 2.49 2.48 1.50 1.03

Source: PSA
7 ECONOMIC IMPACT OF COVID-19 IN THE PHILIPPINES

Figure 8 Gross Value Added of Services Subsectors, 2017–2019 (Values in USD Billion)
1 2 4 5

67 (6.3%) 45 (4.2%)
6 8 9

88 (8.3%)
3
42 (4.0%)
7
30 (2.8%) 24 (2.3%)
7

10 11

190 (17.9%) 69 (6.5%) 40 (3.8%) 23 (2.2%) 18 (1.7%)

1 Wholesale and retail trade; repair of motor vehicles and motorcycles 7 Public administration and defense; compulsory social activities
2 Financial and insurance activities 8 Information and communication
3 Real estate and ownership of dwellings 9 Accommodation and food service activities
4 Professional and business services 10 Other services
5 Education 11 Human health and social work activities
6 Transportation and storage
Source: PSA

Tourism Industry
Travel and Tourism is among the sectors that have
been greatly affected by the COVID-19 pandemic.
The closing of borders, airports, and hotels as well
as restrictions on mass gatherings, land travel and
related services across the world put about 120
million jobs at risk.10
contribution in the previous year. Employment in
tourism industries was at 5.7 million persons in 2019,
which contributed 13.5% of the total employment,
higher than the 13.0% share in the previous year.
Impact of COVID-19 on the Philippine Industry

By the end of April 2020, all countries in the world had
imposed some travel restrictions according to United
Nations-World Tourism Organization (UNWTO).
The sudden interruption of travel, fueled by fear of
infection, put tourist arrivals in free fall. The drop first
occurred in East Asia, where the pandemic originated
and which was first to impose travel restrictions,
followed by Southeast Asia.11
This is by far the worst result in the historical
series of international tourism since 1950 and puts
an abrupt end to a 10-year period of sustained
growth since the 2009 financial crisis.
Tourism plays a significant role on the social,
economic and environmental development, and
cultural landscape of the Philippines.12 In 2019,
the tourism industries contributed 12.7% of the
total economic output, higher than its 12.3%
In January to October 2020, the Philippines received a
total of 1,318,719 foreign visitors, a decline of 80.61%
from the 6,800,052 arrivals in the same period last
year, translating to losses of about USD6.4 billion
(PhP317 billion).13
Table 3 shows the negative growth of the transportation
and storage sector and accommodation and food
services from Q1 to Q3 of 2020. Lowest growths
were recorded in Q2 2020 with the imposition of a
series of lockdowns in the country since March 2020.
The Department of Tourism (DOT) reported that
an estimated of at least 4.8 million Filipinos in the
tourism sector have been affected, through loss of
jobs or lower salaries.14

10 https://www.pwc.com/ph/en/publications/tourism-pwc-philippines/tourism-covid-19.html
11 https://www.adb.org/sites/default/files/publication/633726/reviving-tourism-amid-covid-19-pandemic.pdf as of September 2020
12 https://psa.gov.ph/sites/default/files/2019%20Philippine%20Tourism%20Satellite%20Accounts%20%28PTSA%29%20Report.pdf as of June 2020
13 https://mb.com.ph/2020/11/12/ph-tourism-industry-lost-p317-b-from-jan-to-oct-2020/
   USD value converted using USD average exchange rate: USD1= PhP49.9173 (Jan-Oct2020)
   Note: 2020 data on tourist arrivals per country are unavailable.
14  https://travel.economictimes.indiatimes.com/news/destination/international/philippines-4-8-mln-workers-in-tourism-industry-hit-by-pandemic/78659935 as of
14 October 2020
 FACT FILE 2020 8

Table 3 Sectoral Growth, 2017-2020 (Q1-Q3), (in constant 2018 prices and in Percent)
2020
Sector 2017 2018 2019
Q1 Q2 Q3 Q1-Q3
SERVICES 7.4 6.7 7.5 0.6 -17.0 -10.6 -9.0
Transportation and storage 7.3 7.7 6.3 -11.4 -58.5 -28.1 -32.7
Accommodation 11.6 8.6 6.2 -16.4 -67.2 -52.7 -45.4
and food service activities
Source: PSA

To revive tourism successfully, the government,
together with travel and tourism sector, has been
implementing tourism recovery plans as the
government needs to rebuild tourist confidence and
encourage innovation and investment for a resilient
and sustainable tourism sector.
The DOT and the Department of Labor and
Employment (DOLE) signed a Joint Memorandum
Circular to provide financial assistance to displaced
workers15 in the tourism sector. This program is part
of the Bayanihan to Recover as One Act (Bayanihan
II) to address the pandemic’s impact on Philippine
tourism.16
The Philippine tourism sector remains committed to
the recovery plan of the ASEAN as this would help
the country attract more foreign investments. As a
cooperative and productive member of the ASEAN,
the Philippines is fully committed to the organization’s
vision for the tourism industry, which is seen as vital
in sustaining the socioeconomic growth of ASEAN
member states.17
Among the initiatives under the ASEAN recovery
plan are the enhancement and standardization of
health and safety protocols for destinations and
expansion of ASEAN digital tourism services and
infrastructure; enhancement of ASEAN tourism
statistics and information management framework;
and enhancement of capacity development efforts in
line with the evolving new normal and digitalization
of tourism.
The recovery plan also eyes the development of
tourism products that are applicable to the new
standards being developed and that would enhance
the ASEAN’s competitiveness in the post-pandemic
period. Moreover, the DOT is looking to further
accelerate the development of digital tourism,
capacity development and sustainable tourism.

15 Include displaced employees of DOT-accredited Primary and Secondary Tourism Enterprises, LGU-licensed Primary Tourism Enterprises, Members of registered
Community-based Tourism Organizations, displaced DOT-accredited and LGU-licensed Tour Guides.
16 http://tourism.gov.ph/CashForWorkProgram.aspx
17 https://www.philstar.com/business/2020/12/04/2061284/philippine-tourism-sector-backs-recovery-plan-asean as of 04 December 2020
9 ECONOMIC IMPACT OF COVID-19 IN THE PHILIPPINES

II. Performance of Major Economic Indicators

Trade
Figure 9 shows the country’s quarterly merchandise
trade performance. Generally, PH exports increases
in the first three quarters, and declines in the fourth
quarter. However, in 2020, exports declined by 19.0%
from Q1 to Q2 due to the COVID-19 pandemic which
dampened global economic activities, hampered
logistics and transportation, and disrupted global
value chains. The same was observed for imports
which declined by 31.7% from Q1 to Q2.

In the 3rd quarter of 2020, both exports and imports

recorded positive growths at 36.4% and 43.4%,
respectively. This may be due to the gradual easing
of community quarantine restrictions and resumption
of economic activities of industries from the second
to the third quarter of the year, which signifies the
start of economic recovery.

Figure 9 Trade Performance, 2017 - 2020 (Q3) (in USD Billion)

35.00

30.00

25.00

20.00

15.00

10.00

5.00
–
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3
2017 2018 2019 2020
Exports 16.76 17.28 17.80 16.88 16.91 17.49 18.24 16.68 16.58 18.00 18.63 17.72 15.73 12.75 17.39
Imports 22.86 22.93 23.59 26.72 25.01 28.62 29.87 29.34 26.92 28.09 28.69 27.90 23.26 15.89 22.79
Source: EMB Tradeline as processed by BTIPR
 FACT FILE 2020 10

Performance of Top 3 Export Sectors

For the period January to September 2020, PH
exports to the world amounted to USD45.87 million, a
decline by 13.8% from its value of USD53.31 million
in January-September 2019. The following remained
as the top exported products: a) electronic products;
b) mineral products; c) agro-based products; d)
other manufactures; and e) machinery and transport
equipment. However, the pandemic has resulted in
consistent drops in PH exports, with losses primarily
borne by these top products.
With the electronics products comprising more than
half of total PH exports on average (e.g., 55.0%
for the period 2017-2019, and 57.2% in January-
September 2020), the 11.4% drop in electronics
exports, along with the export reduction of the rest
of the top exporting sectors, largely contributed
to the overall decline in total Philippine exports in
January-September 2020.

Figure 10 PH Commodity Exports to the World, January–September 2020

Others
15.6%

Machinery &
Transport Equipment
5.4%
Other Manufactures
5.9% Electronic Products
57.2%

Agro-Based Products
7.7%

Mineral Products
8.2%
Source: EMB Tradeline as processed by BTIPR

Figure 11 PH Commodity Exports to the World, 2017-2019 (in USD Billion)

45.00
40.00
35.00
30.00
25.00
20.00
15.00
10.00
5.00
–
Machinery & Transport
Electronic Products Mineral Products Agro-based Products Other Manufactures
Equipment
2017 36.54 4.29 4.12 4.57 5.09
2018 38.33 4.04 4.58 4.64 4.81
2019 40.02 4.68 5.17 4.23 4.13
Source: EMB Tradeline as processed by BTIPR
11 ECONOMIC IMPACT OF COVID-19 IN THE PHILIPPINES

Top Export Markets and Import Sources

The PH top export markets include Japan, China and USA. The decline in exports to major partners was
brought about by the reduced international demand as these countries were also severely hit by the pandemic.

Table 4 Top Export Markets, 2017–2020 (January-September)

(Values in USD Billion, Share and Growth in Percent)
January-September
2017 2018 2019
2019 2020
Growth
Value Share Value Share Value Share Value Share Value Share
Total 68.71 100.00 69.31 100.00 70.93 100.00 53.21 100.00 45.87 100.00 -13.79
Japan 10.85 15.79 10.32 14.89 10.67 15.05 7.95 14.94 7.28 15.86 -8.50
China 8.02 11.67 8.82 12.72 9.81 13.84 7.44 13.99 6.89 15.02 -7.44
USA 9.66 14.06 10.64 15.35 11.57 16.31 8.68 16.31 6.81 14.85 -21.55
Source: EMB Tradeline as processed by BTIPR

Top PH import sources were China, Japan, and South Korea. The huge decline in PH imports in January
– September 2020 was primarily due to reduced domestic demand. In addition, it may also be attributed
to the slowdown of manufacturing activities as the bulk of PH imports were capital goods, raw materials
and intermediate goods which are used as inputs to the said industry.

Table 5 Top Import Suppliers, 2017–2020 (January-September)

(Values in USD Billion, Share and Growth in Percent)
January-September
2017 2018 2019
2019 2020
Growth
Value Share Value Share Value Share Value Share Value Share
Total 96.09 100.00 112.84 100.00 111.59 100.00 83.69 100.00 61.95 100.00 -25.98
Japan 17.46 18.17 22.01 19.51 25.50 22.85 19.08 22.80 13.96 22.53 -26.86
China 10.91 11.36 10.82 9.59 10.58 9.48 7.90 9.44 5.74 9.27 -27.32
South 8.47 8.81 11.31 10.02 8.48 7.60 6.50 7.77 5.06 8.17 -22.20
Korea
Source: EMB Tradeline as processed by BTIPR

Investment billion (or PhP75.6 billion) – lower by 72.8% than the

USD5.3 billion (or PhP278.0 billion) recorded in the
Total Foreign Approved Investments18 same period in 2019.

Total foreign investments (FI) approved in the first
nine (9) months of 2020 by the six (6) investment
promotion agencies19 (IPAs), namely: Board of
Investments (BOI), Clark Development Corporation
(CDC), Philippine Economic Zone Authority (PEZA),
Subic Bay Metropolitan Authority (SBMA), Authority
of the Freeport Area of Bataan (AFAB), and Cagayan
Economic Zone Authority (CEZA) totaled to USD1.5
The significant decline in foreign investment pledges
may be partly attributed to the uncertainties caused
by the pandemic. However, the surge in investment
commitments from Filipino nationals is indicative of
investor confidence on the Philippine economy as the
government continues to implement policies to curb
the spread of the virus and at the same time gradually
reopen the economy.

18 https://psa.gov.ph/sites/default/files/Second%20Quarter%202020%20Foreign%20Investments%20Report.pdf
19 No foreign investments were recorded by BOI-Bangsamoro Autonomous Region in Muslim Mindanao (BOI-BARMM).
 FACT FILE 2020 12

Table 6 Total Approved Investments by Source/Country of Investor, 2019 – 2020 (January-September)

(Values in USD Million*, Share and Growth in Percent)
Jan–Sept
2019 Share Growth
2019 2020
Rank
Filipino Investors 17,742.5 11,888.0 15,818.6 91.3 28.0
Foreign Investors 7,531.7 5,339.8 1,510.4 8.7 -72.8
1 USA 226.4 131.4 438.8 29.1 221.2
2 China 1,712.0 45.4 293.4 19.4 521.7
3 UK 17.1 22.0 258.4 17.1 1,029.7
4 Singapore 3,405.0 3,348.5 114.1 7.6 -96.7
5 Japan 383.9 332.9 101.8 6.7 -70.6
6 Netherlands 277.9 247.8 87.1 5.8 -66.2
7 South Korea 800.8 682.2 45.7 3.0 -93.6
8 Taiwan 54.3 46.3 40.1 2.7 -16.7
9 France 42.1 24.0 30.4 2.0 21.5
10 Germany 55.7 33.1 14.7 1.0 -57.3
Others 556.4 426.1 85.9 5.7 -80.6
Source: PSA
*USD values converted using respective BSP annual average exchange rates: USD1= PhP51.7958 (2019); PhP52.0613 (Jan-Sep 2019), and PhP50.0768
(Jan-Sep 2020)
**Ranked based on Jan-Sep 2020 performance.

Table 7 Total Foreign and Filipino Approved Investments by Industry, 2019 – 2020 (January-September)
(Values in USD Million*, Share and Growth in Percent)
Jan–Sept
2019 Share Growth
TOTAL APPROVED INVESTMENTS 2019 2020
25,274.2 17,227.8 17,329.0 100.0 -3.2
Rank By Industry
1 Transportation and Storage 622.8 288.9 13,458.5 77.7 4,381.2
Electricity, gas, steam & air
2 9,309.2 7,185.3 1,379.6 8.0 -81.5
conditioning supply
3 Real estate activities 2,116.2 1,428.2 1,018.2 5.9 -31.4
4 Manufacturing 2,184.8 1,609.7 754.9 4.4 -54.9
Administrative and support service
5 347.7 195.9 303.4 1.8 49.0
activities
Accommodation and food service
6 313.8 298.8 190.0 1.1 -38.8
activities
7 Agriculture, Forestry and Fishing 110.6 92.4 78.4 0.5 -18.4
Wholesale and retail trade; repair of
8 86.2 62.0 66.3 0.4 3.0
motor vehicles and motorcycles
9 Construction 1.4 1.0 32.0 0.2 2,883.7
10 Mining and quarrying 27.6 27.3 11.6 0.1 -59.0
Others 10,154.0 6,038.3 36.0 0.2 -99.4
Source: PSA
*USD values converted using respective BSP annual average exchange rates: USD1= PhP51.7958 (2019); PhP52.0613 (Jan-Sep 2019),
and PhP50.0768 (Jan-Sep 2020)
**Ranked based on Jan-Sep 2020 performance.
13 ECONOMIC IMPACT OF COVID-19 IN THE PHILIPPINES

USA ranked first with investment commitments
reaching USD438.8 million (or PhP22.0 billion),
29.1% of total foreign investment pledges for the
period. China ranked second with investment pledges
amounting to USD293.4 million (or PhP14.7 billion)
(19.4% share), while UK ranked third with investment
pledges totaling USD258.4 million (or PhP12.9 billion),
17.1% of the total foreign investment commitments.
For the first nine (9) months of 2020, the bulk of
investment intentions from both foreign and Filipino
nationals was dedicated to the Transportation and
Storage Industry with USD13.5 billion (or PhP674.0
billion), 77.7% of total approved investments.
Electricity, gas, steam & air conditioning supply
ranked second with investments valued at USD1.4
billion (or PhP69.1 billion), followed by Real estate
activities with USD1.0 billion (or PhP51.0 billion).
Investment commitments for January-September
2020 are expected to generate 104,802 jobs,
lower by 14.8% compared with the previous
year’s projected employment of 123,008.
The Manufacturing sector would absorb the most
number of jobs for the period at 37,383 jobs.
Net Foreign Direct Investments (FDI), June 2020 vs.
June 201920
June 2020 saw a positive development in the
country’s net FDI that was underpinned by the gradual
reopening of advanced economies with investment
interest in the Philippines, and the country’s
sustained strong macroeconomic fundamentals,
despite the COVID-19 pandemic. Net equity capital
investments expanded to USD173 million from USD29
million in 2019, following the 137.6% increase in

Q2 2020 Foreign Investment Pledges Lowest in Nine (9) Quarters

Investment pledges made by foreign companies
in Q2 2020 slumped to its lowest level in over
two (2) years. The decline may still be reflective
of investor sentiment and confidence on the
Philippines’ approach to managing and containing
the pandemic relative to other economies.
The total foreign investment pledges for January-
September 2020 was boosted by pledges recorded
in Q3 2020, amounting to USD634.1 million (41.0%
share to the total).

Figure 12 Approved Foreign Investments, 2018-2020 (Q3) (in USD Million)

4,000.0
3,524.1
3,500.0

3,000.0

2,500.0
2,198.3
2,000.0
1,713.9
1,500.0

1,000.0
796.3
590.0 878.3 952.3 634.1
500.0 306.4
276.1 573.4

0.0
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3
2018 2019 2020
Source: PSA

20 FDI Net Inflows Continue to Rise Year-on-Year in June 2020. BSP Press Release on 15 Sep 2020, https://www.bsp.gov.ph/SitePages/MediaAndResearch/MediaDisp.
aspx?ItemId=5544
 FACT FILE 2020 14

equity capital placements to USD185 million (from
USD78 million) and the decline in withdrawals by
74.9% to USD12 million (from USD49 million).
The bulk of the equity capital placements for the
month originated from Japan (USD102.46 million),
UK (USD36.82 million), and USA (USD12.64 million).
By economic activity, these placements were invested
mainly in manufacturing (USD71.77 million); human
health and social work (USD36.32 million); and,
financial and insurance activities (USD33.71 million).
Even during the pandemic and community
restrictions, FDI towards Manufacturing remained
strong. This was possible as export-manufacturing
enterprises were allowed to continue operations as
identified essential activities. The USD71.77 million
FDI inflows received by Manufacturing for June
2020 was the highest since it started to decline
in February 2020 (USD55.44 million) from a net of
USD300.82 million in January. This reflects some
semblance of recovery as investment inflows are
eventually increasing.21
Part of the FDI that went to manufacturing were the
PhP2.21 billion equity placements made by Lotte
Chilsung Beverage Co. Ltd. to takeover 30.7% of
Pepsi-Cola Products Philippines, Inc.’s outstanding
shares; and the completion of the PhP9.6 billion sale
of shares, representing 11.9% of First Gen Corp. to
KKR & Co.22

Table 8 Net Foreign Direct Investments, 2019-2020 (June) (in USD Million)
June 2019 June 2020 Growth Rate (%)
Net Inflows 449 481 7.1
Net Equity Capital Investments 29 173 491.3
Placements 78 185 137.6
Withdrawals 49 12 -74.9
Reinvestment of Earnings 99 80 -19.4
Debt instruments, net 321 229 -28.8
Source: BSP

Figure 13 Net FDI by Country, June 2020 Figure 14 Net FDI by Industry, June 2020
(in USD Million) (in USD Million)
Others, USD39 M
(22.8%)
Administrative and
Support Service Activities,
Others, USD47 M USD0.1 M Manufacturing,
(27.4%) (0.1%) USD72 M
(41.5%)
Wholesale and Retail
Trade; Repair of
Motor Vehicles and
Motorcycles, USD0.6 M
(0.4%)
Taiwan, USD7 M
(4.3%)
Real Estate,
USD27 M
USA, USD13 M
(15.7%)
(7.3%)
Japan, USD102 M
Singapore, USD1 M (59.2%) Financial & Insurance
(0.6%) Activities, USD34 M
(19.5%)
Netherlands, USD2 M
(1.2%)
Source: BSP Source: BSP

21 Net FDI Report for June 2020, prepared by the Bureau of Trade and Industrial Policy Research (BTIPR)-DTI, 16 Sep 2020
22 Ibid.
15 ECONOMIC IMPACT OF COVID-19 IN THE PHILIPPINES

January-June 202023 The pandemic’s impact on the Philippines’ major

The growth in FDI net inflows in June 2020 further
eased the cumulative contraction in FDI to 18.3% in
January to June (to USD3 billion from USD3.7 billion)
from a cumulative decline of 21.9% in January to May.
The favorable performance in net investments in equity
capital was attributed to the combined effects of an
expansion in equity placements of 16.6% to USD1
billion (from USD881 million), and a contraction
in withdrawals of 77.1% to USD117 million (from
USD512 million). Equity capital placements were
sourced primarily from Japan (USD353.72 million);
the Netherlands (USD215.04 million); and, Singapore
(USD100.49 million). These were infused mainly in
manufacturing (USD538.48 million); financial and
insurance activities (USD108.74 million); and, real
estate (USD95.65 million).
sources of FDI, such as China, Thailand, Korea and
the US is evident in the drastic decline in inflows
from these countries for the period January-June
2020 – China (93.32%), Thailand (98.08%), Korea
(90.78%), and the US (35.55%). Among the country’s
top FDI sources, only Singapore was able to increase
its FDI to the Philippines.
Inflation Rate
The Philippines recorded an average inflation rate
of 2.5% for the period January-October 2020, a 0.1
percentage point lower than the 2.6% recorded in
the same period last year. Prices for food and non-
alcoholic beverages – the most heavily-weighted
commodity in the country’s basket of goods – spiked
from March to April 2020 mainly due to increased
demand as consumers stocked up on these goods
in anticipation of and/response to community

Figure 15 Net FDI, By Industry, 2019-2020 (January-June) (in USD Million)

600.00
500.00
400.00
300.00
200.00
100.00
0.00
-100.00
-200.00
-300.00
Financial and Insurance Administrative and Wholesale and Retail Trade;
Manufacturing Real Estate Repair of Motor Vehicles
Activities Support Services and Motorcycles
Jan-Jun 2019 113.8 106.4 120.9 53.0 -243.2
Jan-Jun 2020 538.5 108.7 95.7 88.2 58.6
Source: BSP

Table 9 Net Foreign Direct Investments (BPM6 Concept), FY 2017-2020 (January-June)

(Values in USD Million, Change in Percent)
Net FDIs TOTAL,
Item Jan-Jun Change 2017
2017 2018 2019p/ -2019
2019p/ 2020p/
Non-Resident Investments in 10,256 9,949 7,685 3,670 2,997 -18.3 27,890
the Philippines
Equity other than reinvestment 3,398 2,346 1,449 369 910 146.8 7,193
of earnings, net
Placements 3,885 2,935 2,147 881 1,027 16.6 8,967
Withdrawals 487 590 698 512 117 -77.1 1,775
Reinvestment of Earnings 863 897 1,046 553 433 -21.7 2,805
Debt instruments, net 5,996 6,706 5,191 2,747 1,654 -39.8 17,893
p/
Preliminary
Source: BSP
Note: Totals/percentages may not add up due to rounding.
23 FDI Net Inflows Continue to Rise Year-on-Year in June 2020. BSP Press Release on 15 Sep 2020, https://www.bsp.gov.ph/SitePages/MediaAndResearch/MediaDisp.
aspx?ItemId=5544
 FACT FILE 2020 16

quarantine measures. store owners opted to temporarily or close down their

A slight decrease in the index for alcoholic beverages
and tobacco was also noted as the local government
units (LGUs) implemented different levels of liquor
ban during the community quarantine24. The index for
clothing and footwear was also negatively affected
due to the closing of non-essential businesses.
Restaurant and miscellaneous goods and services
also declined mainly due to the restrictions imposed
on such establishments which limited stores to drive-
through, take-out and delivery services only.25 Some
business due to lack of customers.
The lowering of index for housing, water, electricity,
gas and other fuels could be attributed to the
deferment of payment for housing mortgage, loans and
rent, as well as electric and water bills enforced by
Republic Act 11469 or the “Bayanihan to Heal as One
Act.” In addition, the decline in education index could
be partly due to the change in school calendar from
June to October26 , as well as the reduction in school
requirements and educational materials.

Figure 16 Inflation Rate, 2017-2020 (January-October)

6
5.2
5

4
2.9
3 2.5
2.9
2 2.7
2.6 2.5 2.5 2.4 2.3 2.5 2.5
2.2 2.1
1

0
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Average
2017 2018 2019
2020
Source: PSA

Table 10 Inflation Rate by Commodity Group, 2017-2020 (January–October)

2020
Commodity Group 2017 2018 2019
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Ave
Food and Non-Alcoholic 3.0 6.8 2.1 2.2 2.1 2.6 3.4 2.9 2.7 2.4 1.8 1.5 2.1 2.4
Beverages
Alcoholic Beverages 6.9 20.0 12.8 19.2 18.2 18.0 17.9 18.0 18.5 19.3 17.7 12.9 11.3 17.1
and Tobacco
Clothing and Footwear 2.4 2.4 2.6 2.7 2.7 2.7 2.6 2.4 2.4 2.2 1.9 1.8 1.7 2.3
Housing, Water, Electricity, Gas, 2.7 3.9 2.4 2.5 1.8 1.1 0.2 0.2 0.3 0.8 0.9 1.2 0.9 1.0
and Other Fuels
Furnishing, Household Equipment 2.3 3.1 3.2 3.1 3.5 4.2 4.2 4.1 4.1 4.0 3.9 3.7 3.7 3.9
and Routine Maintenance of the
House
Health 2.6 3.3 3.5 2.9 2.9 2.9 2.8 2.8 2.8 2.8 2.8 2.8 2.7 2.8
Transport 5.0 6.6 1.0 3.0 1.8 -1.8 -6.2 -5.5 2.4 6.3 6.3 8.3 7.9 2.3
Communication 0.3 0.3 0.3 0.4 0.4 0.5 0.3 0.3 0.4 0.3 0.3 0.4 0.4 0.4
Recreation and Culture 1.2 2.0 2.5 1.5 1.5 1.6 1.6 1.4 1.2 1.1 -0.1 -0.5 -0.6 0.9
Education 2.5 -0.8 0.2 4.7 4.7 4.7 4.7 4.7 1.6 0.5 0.1 1.0 1.2 2.8
Restaurant and Miscellaneous 1.7 3.6 3.4 2.6 2.6 2.6 2.4 2.4 2.3 2.5 2.3 2.3 2.4 2.4
Goods and Services
Source: PSA

24 https://www.cnnphilippines.com/news/2020/4/18/liquor-makers-appeal-total-alcohol-ban-covid-quarantine.html
25 DTI Memorandum Circular 20-08: Ensuring Unhampered Movement of Cargo and Transit of Personnel of Business Establishments Allowed to Operate During the Enhanced
Community Quarantine of Luzon, amending for this purpose MC No.20-06.
26 DepEd Department Order No. 030 Amendment to DepEd Order No. 007, s. 2020 (School Calendar and Activities for School Year 2020-2021)
17 ECONOMIC IMPACT OF COVID-19 IN THE PHILIPPINES

On the other hand, transportation was the most Employment Indicators

heavily affected among the goods and services due
to transport restrictions implemented to curb the
spread of the virus.27 The deflation persisted for three
(3) months from March to May, when community
quarantine guidelines were relaxed to Modified
Enhanced Community Quarantine (MECQ) and General
Community Quarantine (GCQ) allowing for limited
transportation services in response to the partial
opening of business establishments.28
The country’s unemployment rate in October 2020 was
estimated at 8.7%, which is equivalent to 3.8 million
unemployed Filipinos who are 15 years old and over.
This is the lowest since April 2020, when unemployment
rate hit its all-time high at 17.6%. However, it is still
higher than the 4.6% (or about 2.0 million unemployed
Filipinos who are 15 years old and over) recorded in
October 2019.31

Overseas Filipino Remittances In terms of year-on-year employment among the sub-

Following the closure and/or reduction of labor
requirements of businesses and establishments in
host countries to keep afloat during the pandemic, the
number of returning overseas Filipinos flown back to the
Philippines has continued to increase reaching 287,301
in December.29 The revocation of employment contracts
abroad, travel restrictions imposed on international
travels, as well as additional medical requirements
for those allowed to travel outside the country, also
aggravated the situation.30
All these have taken a toll on the country’s receipt of
overseas remittances, which recorded a 1.36% decrease
in January-September 2020 from USD22.19 billion in
2019 to USD21.89 billion in 2020. The decline in
remittances was noted primarily from the Middle East,
United Kingdom, Canada and Japan, which was partly
mitigated by the increase in remittances from Taiwan,
Singapore, and Qatar, among others.
sectors, arts, entertainment and recreation had the
highest decline at 38.2%, followed by accommodation
and food service activities at 33.2%. On the other
hand, water supply, sewerage, waste management
and remediation activities had the highest employment
growth (23.2%), followed by fishing and aquaculture
(5.4%), and education (5.2%).
The Department of Labor and Employment (DOLE) has
demonstrated significant strides despite the lingering
threat and challenges brought about by the Covid-19
pandemic. DOLE was able to provide 658,886 workers
in the private sector with PhP3.3 billion in assistance
under the COVID-19 Adjustment Measures Program
or CAMP.
In the informal sector, 423,511 workers were able to
receive PhP1.6 billion in emergency employment under
the Tulong Panghanapbuhay sa Ating Disadvantaged/
Displaced Workers (TUPAD) program.32

Table 11 Overseas Filipino Remittances, 2017-2020 (January-September) (in USD Million)

Jan-Sep Growth Rate
Rank Country 2017 2018 2019
2019 2020 (20%)
1 USA 9,422.31 9,986.39 11,318.34 8,309.24 8,776.91 5.63
2 Singapore 1,754.21 1,848.86 1,906.49 1,410.76 1,547.19 9.67
3 KSA 2,508.95 2,230.06 2,098.29 1,599.06 1,294.18 -19.07
4 Japan 1,468.88 1,514.21 1,795.38 1,185.33 1,174.42 -0.92
5 UK 1,356.83 1,497.57 1,566.96 1,137.90 1,025.24 -9.90
6 UAE 2,540.48 2,035.30 1,592.45 1,232.92 945.88 -23.28
7 Canada 644.75 976.77 1,015.80 758.88 742.39 -2.17
8 Hong Kong 735.20 845.15 801.75 592.35 620.01 4.67
9 Qatar 1,110.41 1,008.08 758.14 555.72 607.01 9.23
10 Taiwan 401.16 583.84 597.63 436.50 503.04 15.24
Others 6,116.61 6,416.88 6,682.07 4,968.63 4,649.65 -6.42
Total 28,059.79 28,943.11 30,133.30 22,187.29 21,885.90 -1.36
Source: PSA

27 https://www.pna.gov.ph/articles/1096849
28 https://www.philstar.com/headlines/2020/05/13/2013840/guidelines-out-shift-modified-ecq-nears
29 https://mb.com.ph/2020/12/06/dfa-repatriates-9981-more-ofws/
30 https://asiatimes.com/2020/08/covid-19-pops-philippine-remittance-bubble/
https://dfa.gov.ph/covid-19-advisories/26396-travel-advisory-general-travel-restrictions-by-foreign-countries-on-all-travelers
31 https://psa.gov.ph/content/employment-situation-october-2020
32 https://www.dole.gov.ph/news/statement-of-secretary-silvestre-h-bello-iii-during-the-dole-year-end-press-conference-on-december-17-2020/
 FACT FILE 2020 18

PhP3.5 billion was disbursed in cash assistance to about
350,000 OFWs displaced by the pandemic under the
Abot Kamay ang Pagtulong (AKAP) program funded
under Bayanihan 1. Under the Bayanihan to Recover
as One Act (Bayanihan 2), a total of PhP16.4 billion
for cash assistance was allocated to DOLE.
The pandemic has prompted the Labor Department to
issue labor advisories, policy orders, and memorandum
circulars jointly with other agencies to protect the
workers and help businesses cope with the crippling
effect of the health crisis.

To stimulate the competitiveness of MSMEs,

DOLE provided training and technical assistance
to 11,139 firms.

Figure 17 Unemployment Rate, 2017-2020 (October) (in Percent)

20.0
17.6
18.0
16.0
14.0
12.0
10.0 8.7
10.0
8.0 6.6
5.7 5.6 5.3 5.5 5.4 5.3 5.4
6.0 5.0 5.1 5.1 4.6 5.3
4.0
2.0
Jan Apr Jul Oct Jan Apr Jul Oct Jan Apr Jul Oct Jan Apr Jul Oct
0.0 2017 2018 2019 2020
Source: PSA

Table 12 Employment Growth by Sector, 2019- 2020 (October) (in Percent)

Sector Apr-Jul 2020 Jul-Oct 2020 Oct 2019-Oct 2020
PHILIPPINES 22.1 -3.6 -6.3
Agriculture 24.1 -10.2 0.7
Agriculture and forestry 27.3 -13.6 0.0
Fishing and aquaculture 1.5 19.5 5.4
Industry 35.3 -6.2 -10.2
Mining and quarrying 57.8 -36.0 -3.2
Manufacturing 25.0 -10.2 -17.0
Electricity, gas, steam and air-conditioning supply 35.9 -15.1 -14.5
Water supply; sewerage, waste management and remediation activities 9.7 33.6 23.2
Construction 44.5 -1.5 -4.9
Services 17.3 0.5 -7.9
Wholesale and retail trade; repair of motor vehicles and motorcycles 37.7 -5.7 -0.7
Transportation and storage 12.3 -3.0 -18.9
Accommodation and food service activities 3.7 4.7 -33.2
Information and communication 14.6 48.0 5.0
Financial and insurance activities 27.5 7.7 -6.7
Real estate activities 33.6 -18.9 -25.7
Professional, scientific and technical activities 6.4 15.8 -6.9
Administrative and support service activities 2.1 13.0 2.5
Public administration and defense; compulsory social security 2.9 -4.9 -11.4
Education 4.4 22.5 5.2
Human health and social work activities 18.6 10.4 1.8
Arts, entertainment and recreation -40.3 82.0 -38.2
Other service activities 6.6 -0.8 -5.6
Source: PSA
19 ECONOMIC IMPACT OF COVID-19 IN THE PHILIPPINES

III. Trade and Industry-Related Government

Interventions
Pondo sa Pagbabago at Pag-Asenso – COVID-19 Assistance to Restart Enterprise
(P3 CARES)
P3-CARES is an enterprise rehabilitation financing Salient Features:
facility rolled out by the Department of Trade and
Industry (DTI) thru its financing arm, Small Business Loanable amount PhP10,000 to PhP500,000
Corporation (SBCorp).It aims to help micro and small Front-end 3.2% multiplied by number
enterprises (MSEs) affected by COVID-19 to stabilize financing cost of years
and/or recover their businesses. These include Loan term Up to 24 months depending
enterprises that support efforts of the Department on loan amount,
of Health (DOH) to contain further transmission of excluding grace period
COVID-19, as well as firms adapting for survival Grace period Up to six (6) months
(with defensive business model) for restarting
business, retaining employees, mitigating cash flow
constraints and responding to revenue declines.

Pondo sa Pagbabago at Pag-Asenso - Helping the Economy Recover thru OFW

Enterprises Start-Ups (P3 HEROES)
P3 HEROES is a PhP100 million financing window Salient Features:
catering to repatriated OFWs looking to engage in
Repatriated OFWs due to
starting their own businesses-micro enterprise start- Beneficiaries
Covid-19 pandemic
ups.
PhP30,000 up to Php100,000
The loan should be used as working capital to Loanable amount
free of interest and collateral
start and sustain the business operations such as
for acquisition, production and sale of products *A service fee of 6% will be charged to loans
and required inventory, necessary equipment and with 24 months payment term and 8% for loans
machinery for the business, payment of initial worth with 36 months payment term (inclusive of 12
of operating costs incurred such as payroll, rent, months grace period).
utilities and fixed asset loans.

Buy Local, Go Lokal!

With Philippine MSMEs comprising 99.6% of
the economy, the DTI launched the Buy Local
campaign under Go Lokal! to encourage Filipinos
to buy products grown, made and manufactured
by Filipinos, in partnership with private sector
retailers, mall owners, and vendors. It aims to
help thousands of MSMEs recover their businesses
from the effects of the pandemic, allowing them to
grow stronger and keep their workers employed.
 FACT FILE 2020 20

Livelihood Seeding Program – Negosyo Serbisyo sa Barangay (LSP-NSB)

LSP-NSB brings government services closer to the
people through partnerships between DTI and the
local government units (LGUs), and by capacitating
the barangays to provide basic business advisory or
information dissemination services to MSMEs in the
locality.
The program provides access to development
services for MSMEs through Barangay Development
Councils (BDCs).
MSME beneficiaries of the LSP-NSB Program
are sole proprietors, cooperatives, or sectoral
associations that are located in identified barangays,
including those in Local Communist Armed Conflict
(LCAC) affected areas and vulnerable communities
such as the Indigenous Peoples (IPs), refugees or
stateless persons also known as Persons of Concern
(POCs). Priority assistance is given to MSMEs
affected by natural and human-induced calamities
including health disasters arising from epidemics
and pandemics.

Tech Tools for MSMEs

The DTI has developed the site Tech Tools for MSMEs: Tech tools available:
Reinvent your Business during COVID-19 Crisis to e-Commerce Webinars/Videos
provide information to micro, small and medium
enterprises (MSMEs) on the different technology e-Payment e-Learning
tools, applications, platforms and resources available Digital Marketing Find an Expert
to cope with the challenges and disruptions brought Work from Home APEC MSME
by the community quarantine. Collaborations Marketplace
Logistics Safe Management
Productivity Tools Content
Document and File Development/Video-
Sharing Making Tools

Kapatid Mentor Microenterprise – Money Market Encounter Online (KMME-MME Online)

Implemented since 2016, KMME-MME is a 10-module
mentorship program that optimizes weekly face-to-
face interactions between mentors and the mentees
with the key goal of boosting entrepreneurial capacity
through improved access to Mentorship, Money, and
Market (i.e., the 3Ms).
KMME-MME Online is a digitalized delivery mechanism
of the regular KMME-MME program that will help
our MSMEs to survive in spite of the unprecedented
setbacks that their businesses confront during the
COVID-19 pandemic.
21 ECONOMIC IMPACT OF COVID-19 IN THE PHILIPPINES

IV. Economic Outlook

As the Philippines struggles to contain the pandemic,
the economy’s smaller contraction of 11.5% in the third
quarter, from 16.9% in the second quarter, indicates
that the country is on track for recovery in 2021.
Multilateral organizations project the Philippine
economy to contract by 6.9% to 8.4% in 2020, and
recover with growth of 5.3% to 9.0% in 2021.
and the sluggish resolution of the pandemic over the
past months, with prolonged community quarantine/
lockdowns implemented by the government. Despite
the somewhat softer global contraction, weak public
confidence and low remittances in the Philippines as
a result of the pandemic are expected to continue
weighing on private investment and consumption,
thus IMF projects growth of 5.3% in 2021.34

Asian Development Bank’s forecast of a 7.3% contraction
in 2020 is based on the expected subdued private
consumption and investment for the rest of the
year and the uncertainties about global economic
recovery. However, with the imminent containment
of COVID-19, the gradual opening of the economy, and
more government stimulus measures, ADB projects the
economy to grow by 6.5% in 2021.33
The World Bank projects the Philippine economy to
contract by 6.9% (baseline projection35) in 2020. The
Philippines faces the prospect of an uneven and volatile
economic recovery because of both domestic and
external conditions – the country is still struggling
to contain the pandemic, and it is heavily exposed
to the rest of the world through trade, tourism, and
remittances. 36

International Monetary Fund’s forecast of a decline by The Organization for Economic Co-operation and
6.9% is based on the drastic downturn in Q2 2020 Development projects the Philippine economy to

33 https://www.adb.org/news/philippine-economy-decline-further-2020-amid-covid-19-recovery-2021#:~:text=MANILA%2C%20PHILIPPINES%20(15%20September%20
2020,Bank%20(ADB)%20released%20today.
34 https://www.imf.org/en/Publications/WEO/Issues/2020/09/30/world-economic-outlook-october-2020
35 Refers to a scenario of severe growth slowdown followed by a strong recovery.
36 From Containment to Recovery. World Bank Group. https://www.worldbank.org/en/region/eap/publication/east-asia-pacific-economic-update
 FACT FILE 2020 22

decline by 8.4% in 2020 owing to the 16.9%
contraction posted in Q2 2020. Differentiated
restrictions implemented throughout the country
are expected to add to the ongoing pressure
on private consumption and investment spending.
Moreover, the rising debt costs add to the strain
on the government’s ability to service debt on
existing infrastructure projects, which could jeopardize
investment into future projects. Growth recovery
in 2021 is expected, provided the economy starts
to recover towards the end of 2020 as supported
by the government’s pledge to accelerate public
infrastructure investment.37
Using the Social Accounting Matrix (SAM)-based
multiplier tool38 developed by Ateneo Center for
Economic Research and Development, the DTI-BTIPR
forecasts a contraction of 5.55% for 2020, accounting
only the pandemic’s impact on Philippine exports.
The assumed decrease in exports was based on
actual average changes on the demand for Philippine
exports for Q1-Q3 2020. For 2021, the Philippine
economy is expected to grow by 1.18%, using the
actual average changes on the demand for Philippine
exports from 2009 to 2010, in the aftermath of the
Global Financial Crisis (GFC).39
The extended community quarantine implemented by
the government, though less strict, may lead to even
deeper economic impacts, but the calibrated opening
of the economy, improvements in the public health
management, as well as the imminent arrival of
vaccines should keep the economy on track towards
recovery.

Figure 18 Growth Forecasts, 2020-2021 (in Percent)

10

8 7.4
6.5 6.2
6 5.3
4

2 1.18
0
ADB WB IMF OECD DTI-BTIPR
-2

-4

-6 -5.55
-8 -7.3 -6.9
-8.3 -8.4
-10
2020 2021
Source: Asian Development Bank (ADB), World Bank (WB), International Monetary Fund (IMF), and Organization for Economic Co-operation and
Development (OECD)
Note: DTI-BTIPR’s forecast is based only on change in Philippine exports.

37 Economic Outlook for Southeast Asia, China and India, Volume 2020 Issue 2. OECD. https://www.oecd.org/countries/philippines/economic-outlook-for-southeast-asia-china-
and-india-23101113.htm
38 Used 2015 Philippine 50-sector SAM, estimated using the ratio between 2012 intermediate inputs to 2012 GDP
39 The Global Financial Crisis was used as the benchmark in forecasting 2021 growth given its far-reaching impact on global demand akin to the COVID-19 pandemic, albeit
lesser in magnitude.