MANILA: The economic damage brought by the coronavirus pandemic on the Philippines is more severe than previously thought, officials said on Thursday, forcing the government to forecast a deeper contraction of 8.5 per cent- 9.5 per cent for the year.
The Philippine economy, which before the pandemic was one of Asia’s fastest growing, is likely to be far worse off this year than the previous forecast of a 5.5 per cent decline, although a strong rebound for the next two years is expected, Budget Secretary Wendel Avisado said in a media briefing.
The gradual lifting of coronavirus curbs that dramatically slowed domestic spending and saw record job losses in April should help restore positive growth of 6.5 per cent- 7.5 per cent and 8 per cent- 10 per cent in 2021 and 2022 respectively.
“Further relaxation of restrictions, as we have improved our healthcare system capacity, will keep our economy on the right track towards full recovery,” Avisado said. This year’s budget deficit is estimated to reach 7.6 per cent of gross domestic product, narrower than its 9.6 per cent forecast previously, Avisado said, courtesy of the government’s prudent fiscal policy.
The government, which concluded a $2.75 billion global bond sale on Thursday, its third bond offering this year, expects a budget shortfall equal to 8.9 per cent of GDP in 2021 and 7.3 per cent of GDP in 2022.
Finance Secretary Carlos Dominguez said in the same briefing the government has the necessary resources “to endure this challenge but we must conserve resources for succeeding rounds”.
The $370 billion economy fell deeper into recession in the third quarter as coronavirus curbs continue to limit economic activity. — Reuters
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