Philippines economy to contract 2.0-3.4% in 2020 amid pandemic

SINGAPORE (ICIS)–The Philippine economy is expected to contract by 2.0-3.4% this year, reversing a 6.0% growth in 2019, as the economic toll from the coronavirus pandemic could be as high as peso (Ps) 2.0tr ($40bn).

The cost of the pandemic on the southeast Asian economy is expected to be about 9.4% of 2020 GDP.

A strong recovery is projected for 2021, with the GDP growth rate seen bouncing back to 7.1-8.1%.

Exports this year are expected to fall 4.0%, alongside imports, which are projected to decline a steeper 5.5% amid a pandemic-induced global recession.

For 2021-2022, exports and imports of goods are expected to rebound with growths of 5% and 8%, respectively.

Under the emerging fiscal program for 2020, the government’s budget deficit will hit Ps1.56tr or 8.1% of GDP, given lower revenues and increased spending amid the coronavirus pandemic.

Revenue collection was revised down to Ps2.61tr, which is 13.6% of GDP, while disbursements will grow to Ps4.18tr, equivalent to 21.7% of GDP.

“The emerging disbursement program takes into account the releases for COVID-19 [coronavirus disease] initiatives charged to savings coming from austerity measures, among others,” according to the Philippines’ Development Budget Coordination Committee DBCC).

As of 12 May, the southeast Asian country has 11,086 coronavirus cases with 726 deaths, according to data from the World Health Organisation (WHO).

The novel coronavirus outbreak is believed to have started late last year in China’s central city of Wuhan and has since spread globally. Global cases stand at more than 4m to date.

($1 = Ps50.29)

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