The Philippines’ gross domestic product (GDP) likely slid by a hefty 14.3 percent year-on-year in the second quarter as the economy took a beating from one of the most stringent COVID-19 lockdowns in the region, a global forecasting services provider said.
UK-based Oxford Economics’ second-quarter GDP forecast, provided by its head of India and Southeast Asia economics Priyanka Kishore to the Inquirer on Tuesday, would bring full-year contraction to 6.9 percent or the same level as in 1985.
In 1985, the economy shrank by 6.9 percent, as the administration of then President Ferdinand Marcos struggled with a debt crisis before he was ejected out of Malacañang through the Edsa People Power Revolution in 1986.
The biggest fall in the Philippine GDP was recorded in 1984, at 7 percent.
In its July 1 country economic forecast for the Philippines, Oxford Economics said the projected 6.9-percent drop in GDP this year “[reflected] more caution about the pace of recovery in economic activity after the easing of containment measures.”
“Private consumption is contracting on sharply higher unemployment, falling remittances and pessimistic consumer sentiment. Private investment is weakening as firms delay expansion plans while infrastructure projects are being disrupted by social distancing measures,” it said.
“However, higher health care, social security and stimulus outlays will ramp up government spending, and net exports should also be supportive of growth this year as imports plunge,” it added.
As the enhanced community quarantine from mid-March to May put a halt to 75 percent of the economy, Oxford Economics noted that exports and imports plunged.
“Export performance from June onward is expected to make a moderate recovery as economic activity picks up following the easing of restrictions but the outlook remains poor given the weak state of demand in many key export markets,” Oxford Economics said, referring to the gradual opening up of three-fourths of the economy under a general community quarantine last month.
Oxford Economics flagged the fallout from the COVID-19 pandemic as the top risk to the economy.