Duterte cites economic gains, but these did not withstand COVID-19

President Rodrigo Duterte during his final State of the Nation Address cited economic gains under his administration prior to the spread of COVID-19, which have been either partially or totally wiped out following the pandemic.

In his SONA on Monday, Duterte thanked Congress and revenue generating agencies for record collections, with the implementation of tax reform measures under his administration.

“Thanks to Congress and revenue-generating agencies, our tax reform sustained our economic growth from the third quarter of 2016 to the fourth quarter of 2019, which made the Philippines one of the fastest growing economies in Asia until the pandemic surged,” he said.

Data from the Philippine Statistics Authority show that the Philippine economy grew by 7.5% in the third quarter of 2016, by 6.6% in Q4 2016; by 6.5% in Q1 2017; by 6.4% in Q2 2017, by 6.1% in Q3 2017; by 6.4% in Q4 2017; by 5.9% in Q1 2018, by 5.6% in Q2 2018, by 6.3% in Q3 2018; and by 6.6% in Q4 2018.

This slowed in 2019, to 5.9% in the first quarter, 5.6% in the second, 6.2% in the third, and 6.6% in the fourth.

The Philippines failed to meet its economic growth targets in 2018 and 2019, and fell into a record-low in 2020.

The Philippine economy averaged a growth of 6.2% under the term of late former President Benigno Simeon "PNoy" Aquino III.

Following the pandemic, economic growth has slumped with five consecutive quarters of declines: by -0.7% in the first quarter of 2020, by -17.0% in the second quarter, by -11.6% in the third quarter, by -8.3% in the fourth quarter, and by -4.2% in the first quarter of 2020.

Duterte in the same speech noted that prior to the pandemic, the Philippines recorded historic debt-to-GDP ratios, revenues, and credit ratings.

The Philippines reported a 14-year high debt-to-GDP ratio of 54.5% in 2020, above the 39.6% in 2019 and the highest since 2006.

In terms of credit ratings, the Philippines has sustained investment grade status, but Fitch Ratings downgraded its credit rating outlook on the Philippines to “negative” due to the increasing risks to the credit profile from the impact of the COVID-19 pandemic. — BM, GMA News