Total Savings In PH Down To ₱3.7 Trillion Due To COVID-19

In 2020, the total savings of the domestic economy reached P3.7 trillion, reflecting a 26.1% decrease from the P5 trillion recorded in 2019.

The decline is primarily attributed to the lockdown measures implemented by the government to control the spread of COVID-19.

The decline is primarily attributed to the lockdown measures implemented by the government to control the spread of COVID-19. The data from the Bangko Sentral ng Pilipinas reveals that these measures impacted domestic consumption and production activities across major industries.

The effect of the pandemic is evident in the 20.5% drop in non-financial corporations' gross savings to P2.2 trillion from P2.8 trillion in the previous year.

Core industries, such as manufacturing, real estate, and utility supply, managed to post net income during the year, albeit about a third lower than in 2019.

The households sector recorded a lower gross saving of P983.2 billion from P1.1 trillion in 2019. The financial corporations, on the other hand, generated an aggregate saving of P564.4 billion, 52.5% higher than the P370.1 billion recorded in the previous year.

The general government became a dissaver at P58.1 billion, a reversal from its P801.5 billion saving in 2019. This was driven mainly by the central government’s dissaving, which arose from the surge in government spending on pandemic-related expenditures and subdued tax collections.

Real investments or capital accumulation fell sharply by 39.5% year-on-year, with non-financial corporations' real investments contracting by 43.3% to P1.6 trillion in 2020 from the P2.8 trillion recorded in 2019.

Public non-financial corporations' real investments more than tripled due to the development and construction of projects of the Manila Water Sewerage System and Bases Conversion Development Authority.

Despite the challenging economic conditions, the households sector expanded its net lender position to P639.6 billion from P89.6 billion in 2019.

The non-financial corporations became net lenders in 2020 after being net borrowers for the last three years. Financial corporations also exhibited a net lending position of P477.1 billion, 87.2% higher than a year ago.

The general government became a larger net borrower in 2020 at P1.1 trillion, 167.6% higher than its net borrowing of P423.3 billion in 2019. This increase is attributed to higher funding requirements for the government’s COVID-19 response measures.

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