MANILA: The Philippines plunged into recession after its biggest quarterly contraction on record, data showed Thursday, as the economy reels from coronavirus lockdowns that have wrecked businesses and thrown millions out of work.
Gross domestic product shrank 16.5 percent on-year in the second quarter, the Philippine Statistics Authority said, when the country endured one of the world’s longest stay-at-home orders to slow the spread of the virus that has devastated economies globally.
It followed a revised 0.7 percent contraction in the first three months of the year and marked the biggest reduction in economic activity since records began in 1981 during the Ferdinand Marcos dictatorship. It is the country’s first recession in three decades.
The outlook for the archipelago is bleak, with the number of coronavirus infections surging past 115,000 this week — a more than fivefold increase since early June when the economy-crippling restrictions were eased.
“Without doubt, the pandemic and its adverse effect on the economy are testing the economy like never before,” said acting Socioeconomic Planning Secretary Karl Chua.
“But unlike past crises, the Philippines is now in a much stronger position to address the crisis.”
As health workers struggle to cope with the influx of patients, more than 27 million people in Manila and four surrounding provinces on the main island of Luzon — which accounts for more than two-thirds of the country’s economic output-- went back into a partial lockdown for two weeks on Tuesday to help ease the strain on hospitals.
But President Rodrigo Duterte, who was reluctant to tighten restrictions after millions lost their jobs in the first shutdown, has warned the country cannot afford to remain closed for much longer.
“The problem is we don’t have money anymore. I cannot give food anymore and money to people,” Duterte said Sunday.
The country’s economic woes have been exacerbated by a drop in remittances from the legion of Filipinos working abroad who typically send money to their families every month, which fuels consumer spending — the main driver of growth.
Remittances dropped 6.4 percent in the first five months, compared with the same period last year, according to the central bank, as thousands of seafarers, cleaners and construction workers lost their jobs and returned home.
Consumer spending in the second quarter plummeted 15.5 percent, the statistics agency said.
“It will be a rough road to recovery as trade-offs between economic recovery and health will remain a big challenge to both the private and public sectors,” said Emilio Neri, lead economist at Bank of the Philippine Islands.
Virus-hit Philippine economy plunges into recession
https://arab.news/pv2j3
Virus-hit Philippine economy plunges into recession
- The outlook for the archipelago is bleak, with the number of coronavirus infections surging past 115,000 this week
- The country’s economic woes have been exacerbated by a drop in remittances from the legion of Filipinos working abroad
Islamic finance in Oman poised for 25% growth: Fitch
RIYADH: Oman’s Islamic finance sector is on track to reach $45 billion this year, rising from $36 billion at the end of 2025, supported by a favorable macroeconomic environment, according to a report by Fitch Ratings.
The rating agency said the anticipated 25 percent year-on-year growth will be underpinned by increasing demand for sukuk as both a funding mechanism and a public policy tool, alongside government-led initiatives and growing grassroots demand for Shariah-compliant financial products.
Sukuk accounted for around 60 percent of US dollar-denominated debt issuance in 2025, a sharp decline from 94.3 percent previously, with the remaining share comprising conventional bonds. Despite this progress, Fitch highlighted ongoing structural challenges, including the absence of Islamic treasury bills and derivatives, an underdeveloped Omani rial sukuk and bond market, and the limited role of Islamic non-bank financial institutions.
The performance of Oman’s banking sector continues to reflect steady advancement toward Vision 2040, the country’s long-term development strategy focused on economic diversification, private sector expansion, and enhanced financial resilience.
Operating conditions remain supportive for both Islamic and conventional banks in Oman, buoyed by elevated, though gradually moderating, oil prices, the report noted.
Expanding credit flows — particularly to non-financial corporates and households — are helping drive the growth of small and medium-sized enterprises and boost domestic investment. These trends are reinforcing Oman’s efforts to reduce dependence on hydrocarbons and build a more diversified economic base.
Fitch projects loan growth of 6 to 7 percent in 2026, fueled by rising demand across both retail and corporate segments. In addition, the proposed 5 percent personal income tax, scheduled for implementation from 2028, is expected to have only a limited overall impact on banks, according to the agency.
Islamic banking in Oman was introduced following the Central Bank of Oman’s preliminary licensing guidelines issued in May 2011, which allowed the establishment of full-fledged Islamic banks and Islamic banking windows operating alongside conventional institutions.
This regulatory framework was formally entrenched in December 2012 through a royal decree amending the Banking Law, requiring the creation of Shariah supervisory boards and granting the central bank authority to establish a High Shariah Supervisory Authority.
