Is response to COVID-19 pandemic enough?

Is response to COVID-19 pandemic enough?


UnionBank Publication

UnionBank Publication

30 Mar 2020, 10:00 — 4 min read

Some analysts are saying that the economic and financial impact of the COVID-19 pandemic will be worse than the 2008-2009 global financial crisis (GFC). If we are going to take their initial assessments seriously, then, the response to this pandemic should be stronger and the scope bigger.



Table 1 


Table 2

Tables 1 describes the fiscal, monetary and macro-financial policies employed during the 2008-2009 GFC, while Table 2 outlines the current policies to support economic growth amidst the Covid-19 pandemic. The GFC hit the Philippines and resulted to a decline in GDP growth, settling at 4.2% in 2008 and a low of 1.1% in 2009. Pre-GFC economic growth was at 6.6% in 2007, and the real economy eventually rebounded to 7.6% in 2010. Fast forwarding to a decade later and GDP growth was at 6.2% in 2018 and a 5.9% in 2019.

Table 3

Table 3 describes the pre-crisis years, i.e., 2007 for the GFC and 2019 for the Covid-19 pandemic. It uses the economic measures recently used by the National Economic Development Authority (NEDA) in its article* to project the impact of COVID-19 on the Philippine economy. Clearly, the Philippine economy in 2007 is not the same as the Philippine economy in 2019. Apart from the trade’s bigger part of the economy, tourism has more than doubled in terms of GDP contribution. Aggregate consumption, the biggest contributor to GDP, and remittance inflows has continuously supported economic growth in more than a decade. An estimated deeper impact of the COVID-19 pandemic on the bigger real macroeconomy, compared to the economic losses caused by the GFC, warrants wider and more encompassing policies. By mere optics, the current crop of policies may have to be augmented further and a more targeted policy support is very much needed.

Also read: 4 preventive measures to reduce the impact of COVID-19 on your business

Article by: Ruben Carlo Asuncion

*NEDA (19 March 2020). Addressing the Social and Economic Impact of the Covid-19 Pandemic.

Disclaimer: While this document is based on information obtained from sources we believe to be reliable, we do not make any representations as to its accuracy, completeness, correctness, timeliness or use for any particular purpose. Opinions and statements expressed here are those of their author(s) as of the date of this report and not of Union Bank of the Philippines (UBP). The opinions and statements provided in this document are subject to change without prior notice. Any recommendation contained in this document does not have regard to the reader’s particular investment objectives, financial situation and any other specific needs. This document is for informational purposes only and UBP is not soliciting any action based on it. Nothing here shall to any extent substitute for the independent investigations and the technical and business judgment of the reader. Your use of this document and any of its contents is at your own risk and UBP does not accept any liability for the results of any action or decision taken on the basis of or reliance on this document or any of its contents.

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