Moody’s Analytics: PH economy contracted by 8% in Q2

The research arm of debt watcher Moody’s Investors Service expects an 8-percent steep drop in the Philippines’ gross domestic product (GDP) during the second quarter due to the stringent COVID-19 lockdown.Moody’s Analytics chief Asia-Pacific economist Steven Cochrane said they downgraded the earlier forecast of a 2.5-percent year-on-year contraction in GDP for the April to June period as “very weak data on manufacturing production, exports and movement indicators have led us to revise our expectations.”“The 8-percent decline is more in line with the most recent high-frequency data,” Cochrane explained.

The government will disclose the second-quarter GDP performance on Thursday, Aug. 6, although economic managers have already conceded that the economy shrank at a faster pace than the surprise 0.2-percent contraction recorded in the first quarter.

Moving forward, Cochrane said Moody’s Analytics expected GDP would “rise on a quarter-to-quarter basis in the third quarter, bringing the recession to an end.”

“But this is based on the assumption that the community quarantines will continue to be eased in coming weeks. The current path of COVID-19 infections, however, puts the risks to this forecast clearly on the downside,” Cochrane said.

President Duterte imposed anew a modified enhanced community quarantine (MECQ) over Metro Manila and Bulacan, Cavite, Laguna and Rizal provinces as health and medical front-liners called for a “timeout” as COVID-19 cases surged. The 15-day MECQ will cover the period Aug. 4-18. INQ