Most private-sector economists projected economic growth to slow at the start of the year no thanks to the new coronavirus disease (COVID-19) pandemic, but some expect the Philippines’ gross domestic product (GDP) to contract as early as the first quarter.
Among 13 economists polled by the Inquirer, nine expect some growth.
One economist sees no first-quarter growth, while three project GDP to shrink.
The government will report on the first-quarter GDP performance, with an adjusted base year of 2018 from 2000 previously, on Thursday, May 7.
The three economists who expect a contraction are Ateneo de Manila University’s Alvin Ang (minus 0.8 percent), Maybank Investment Bank’s Suhaimi Bin Ilias (minus 0.3 percent), and Sun Life Financial’s Patrick Ella (minus 2 percent).
Ang noted that the enhanced community quarantine (ECQ) covering Luzon and other parts of the country since mid-March “stopped activities of 70 percent of the economy,” while Ella expected a “large consumption fall.”
Philippine National Bank’s (PNB) Francisco Trinidad Jr. attributed his zero growth forecast to “the COVID-19 breakout starting in the last few weeks of February that intensified in March and prompted the government to adapt containment measures inimical to production and growth.”
The most optimistic forecast of 4.5 percent belonged to UnionBank of the Philippines’ Ruben Carlo Asuncion, who said that the lockdown “only partially affected first-quarter GDP but has definitely turned off consumption demand, the biggest part of the economy, like a switch—second-quarter GDP growth is expected to show the full impact of the ECQ.”
Security Bank’s Robert Dan Roces projected 4 percent as he also cited the ECQ impacting only since mid-March.
ING Bank Philippines’ Nicholas Antonio Mapa expected 3.9 percent—“weaker but decent growth numbers given Taal eruption [in January] and slower investment momentum given the uncertainty related to the then brewing epidemic now turned pandemic.”
Nomura’s Euben Paracuelles projected 3.7 percent, while Moody’s Analytics’ Brady Seitz said their preliminary forecast placed first-quarter expansion “near 3.5 percent.”
Capital Economics’ Alex Holmes had a forecast of 3 percent, saying that “first-quarter GDP figures for the Philippines are likely to show that the economy grew at its slowest rate in over 10 years last quarter—but worse is still to come.”
Bank of the Philippine Islands’ Emilio Neri Jr. projected 2.9 percent. “Taal’s eruption weakened Calabarzon’s output slightly in January. We also had a somewhat muted Chinese New Year celebration compared to previous years due to health concerns. Tourism, travel and retail activity already softened even before the ECQ, with a meaningful number of travel and hotel bookings canceled,” Neri explained.
For Rizal Commercial Banking Corp.’s Michael Ricafort, the economy grew by 2.3 percent during the first quarter as the drag from the ongoing lockdown “may be offset by the increased spending by consumers/households on food and other basic commodities as many people/families were advised to stay or work from home” while “essential businesses/industries continued to operate.”
As for Citi’s Johanna Chua, a “sharp slowdown” in first-quarter GDP growth of 1.6 percent year-on-year was expected.
Last week, Acting Socioeconomic Planning Secretary Karl Kendrick Chua said the economy could still post positive growth during the January to March period. INQ