Connect with us

Hi, what are you looking for?

Economy

Top 10 economic news of 2020

Here is my modest list of the major economic events of the year.

1. The deep global contraction of gross domestic product (GDP). In the first three quarters of 2020, the Philippines’ GDP in particular had contracted by -9.7%, the worst performing economy in the ASEAN and among the worst performers in the whole world.

2. Global exports also contracted. Restrictions on the mobility of people and goods adversely affected manufacturing, the transport of raw materials and finished products, and, ultimately, merchandise trade. The Philippines, with measly exports of $70 billion in 2019, experienced further low exports of only $46 billion in the first three quarters of 2020.

3. Strict lockdown policies in many countries. The Google COVID-19 Community Mobility Reports (GCCMR) shows how visitors to (or time spent in) categorized places change compared to baseline days, the median value being from Jan. 3-Feb. 6, 2020. When it came to mobility in transit stations in particular, the Philippines seems to have had the strictest lockdown policy in the world with -84 mobility in April and -53 in November.

4. China data is proven to be dishonest again. Consider these: a.) its COVID-19 deaths per million population (CDPMP) was only three considering that the virus started and exploded from there, while Belgium has 1,650 and the UK’s is 1,090; b.) it says it has growth when many countries are in a deep contraction — it cannot hide its exports contraction; and, c.) it does not allow GCCMR to collect data because it will show the extent of its strict lockdown and business contraction (see Table 1).

5. Overspending and over-borrowings by governments. As tax revenues fell due to business shutdowns, many governments did not cut their expenditures but instead expanded spending and subsidies via huge borrowings and the printing of money by their central banks. The Philippines’ central government debt (debts by LGUs not included) was 37% of GDP in 2019 and is projected to rise to 48.9% in 2020 and 52.5% in 2021 (see Table 2).

6. The CREATE bill is refined and retroactive to 2020. The Corporate Recovery and Tax Incentives for Enterprises Act (CREATE) bill in Congress intends to cut the Philippines’ high corporate income tax (CIT) rate of 30% to 25% upon signing into law, likely in early 2021, to be implemented retroactively to July 2020. The bill also targets to cut CIT to 20% by 2027.

7. President’s threat of telecom expropriation. During President Rodrigo R. Duterte’s State of the Nation Address (SONA) in July, he warned Smart and Globe telecoms that “kukunin ko ‘yan, i-expropriate ko sa gobyerno (I will get that, I will have the government expropriate it).” It was a strong, and the first, major threat of corporate expropriation by the administration. Luckily, he realized that many LGUs and some agencies are the reason why telecom firms cannot expand their cell sites and towers quickly.

8. The IPRI report on property rights protection. Government expropriation of private companies, actual or the threat of, is a clear violation of the private property protection enshrined in the Constitution. The International Property Rights Index (IPRI) annual report for 2020, a project of the Property Rights Alliance (PRA), was released last November. The Philippines retained its low global rank of 67-69 of 129 countries (see Table 2).

9. Big infra finished and legislated. Among the huge projects that were completed this year was the Skyway Stage 3 that connects SLEX to NLEX, so vehicles from Southern Luzon can go straight to Northern Luzon without passing on any street of Metro Manila. Then the legislation was passed to allow San Miguel Aerocity in Bulacan, a P736-billion 10-year construction project, to start in early 2021.

10. NAIA rehabilitation uncertainties. The expansion and modernization of the Ninoy Aquino International Airport (NAIA) suffered a double setback this year. First was the termination of the original proponent status (OPS) of the “super consortium” of seven conglomerates (Ayala, Aboitiz, Gokongwei, Andrew Tan, Lucio Tan, Gotianun, Pangilinan) last July, then the termination of the OPS of Megawide-GMR this December.

The year 2020 has not been good. The so-called “new normal” simply cloaked the new dictatorship with strict and indefinite lockdowns. May 2021 bring the realization that this is folly so that human prosperity can resume again.

 

Bienvenido S. Oplas, Jr. is the president of Minimal Government Thinkers

minimalgovernment@gmail.com

Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

Get the daily email that makes reading the news actually enjoyable. Stay informed and entertained, for free.
Your information is secure and your privacy is protected. By opting in you agree to receive emails from us. Remember that you can opt-out any time, we hate spam too!

Latest

Economy

THE BANGKO SENTRAL ng Pilipinas (BSP) sees the country posting a wider balance of payments (BoP) deficit this year as the global outlook remains...

Investing

HMRC’s new penalty regime for late filing and late payments of VAT will be fairer but more complex with interest being charged on all...

Economy

Economic managers said they “strongly support” the creation of the Maharlika Wealth Fund (MWF), after lawmakers agreed to remove a provision in the bill...

Investing

If you’ve been waiting ages for an online order to arrive, you’re not alone. Companies including ASOS, H&M and JD Sports have been getting...

Investing

Ulster University economists expect the Northern Ireland economy to shrink next year, followed by a weak recovery in 2024. The Ulster University Economic Policy...

Investing

The number of people working in programming and computer consultancy has risen by more than 250,000 workers over the past decade, according to Census...

You May Also Like

Investing

The minute that any question pops into your head, you can simply ask Google. No longer do we have to pour over books and...

Investing

Having a good Instagram marketing agency to back up your Instagram account is an absolute must going into the new year. With competition stronger...

Investing

Browsing history makes referring to sites and pages you’ve visited in the past seamless. It’ll help you recall what page you checked out on...

Investing

Insomnia is the most common sleep disorder in the global population. Therefore, it is a problem that many people suffer or have suffered throughout...

Disclaimer: SmartRetirementReport.com, its managers, its employees, and assigns (collectively "The Company") do not make any guarantee or warranty about what is advertised above. Information provided by this website is for research purposes only and should not be considered as personalized financial advice. The Company is not affiliated with, nor does it receive compensation from, any specific security. The Company is not registered or licensed by any governing body in any jurisdiction to give investing advice or provide investment recommendation. Any investments recommended here should be taken into consideration only after consulting with your investment advisor and after reviewing the prospectus or financial statements of the company.

Copyright © 2021 SmartRetirementReport. All Rights Reserved.