MANILA, Philippines — The country’s economic managers have projected gross domestic product (GDP) to contract year-on-year during all four quarters of 2020 to bring full-year contraction to 2-3.4 percent.
This was the latest projection of the Cabinet-level Development Budget Coordination Committee (DBCC), which met on Tuesday to revisit the macroeconomic assumptions and targets in light of the COVID-19 pandemic.
In a statement Wednesday, the Department of Budget and Management (DBM), which chairs the DBCC, said that estimates of the state planning agency National Economic and Development Authority (Neda) had shown potential output losses of about P2.4 trillion or 9.4 percent of GDP this year, as the domestic and global economy grappled with not only the health but also socioeconomic fallout caused by the disease.
Budget Secretary Wendel E. Avisado told the Inquirer that the DBCC’s full-year GDP projection was based on expectations that nominal GDP during the first to fourth quarters would all shrink.
At the most optimistic end of the DBCC projection of 2-percent GDP contraction, 2020 would be the first time since 1998’s 3-percent annual decline that the Philippines shall experience a recession.
In 1998, the Philippines reeled from the 1997-1998 Asian financial crisis as well as the dry spell due to El Niño—and despite it being an election year that saw former president Joseph Estrada catapulted to the highest post in the land.
But at the worst case of 3.4-percent economic contraction in 2020, the Philippines’ GDP would fall at its fastest pace since 1985.
GDP figures provided by National Statistician Claire Dennis B. Mapa to the Inquirer last week showed that the Philippine economy also declined by 0.4 percent in 1991—during the Corazon Aquino presidency, as the country then grappled with the power crisis that had resulted in nationwide “blackouts,” on top of the Gulf War fallout; and in 1984 and 1985 by 7 percent and 6.9 percent, respectively—the waning years of the Ferdinand Marcos dictatorship struggling with a debt crisis before he was ejected out of Malacañang through the peaceful Edsa People Power Revolution in 1986.