UK-based think tank Oxford Economics has further downgraded its 2020 gross domestic product (GDP) projection for the Philippines to a negative 8.2-percent, no thanks to weak consumer spending and project delays due to restrictions amid a prolonged quarantine.
In a note to clients, Oxford Economics assistant economist Makoto Tsuchiya said the projected faster GDP slide from the previous forecast of a 6.9-percent drop “not only reflects a bigger-than-expected contraction in the first half, but also the trends in high frequency data that point towards a less buoyant recovery.”
GDP declined by an average of 9 percent during the first-half recession, such that the government expects the economy to shrink by 4.5-6.6 percent this year.
“We see private consumption contracting this year on high unemployment, depressed remittances and pessimistic consumer sentiment,” Tsuchiya said.
“Private investment is also expected to plunge this year given the uncertainty and delays to projects while infrastructure investments are impeded by social distancing measures,” Tsuchiya said.
“On the positive side, government spending and net exports should support growth,” Tsuchiya added.
Oxford Economics projected the Philippines’ GDP to rebound with a 10.3-percent growth in 2021.
In a separate report, Oxford Economics head of India and Southeast Asia economics Priyanka Kishore placed the Philippines at 11th place among 14 Asia-Pacific countries in its recovery scorecard, just behind cellar dwellers Hong Kong, Indonesia and India, whose respective economic rebound would likely lag behind in the region.
Across metrics covering economic and health vulnerability, lockdown stringency, macro policy response to the COVID-19 pandemic, as well as success in containing coronavirus, the Philippines scored negative 0.12, as it mainly scored among the worst in health indicators such as number of critical care beds and medical doctors per population.
New Zealand scored the highest in Oxford Economics’ recovery scorecard with 0.43; Taiwan, 0.32; Singapore, 0.19; South Korea, 0.18; Vietnam, 0.11; Japan, 0.07; Australia and Malaysia, both 0.05; and China, 0.02.
Besides the Philippines, four other countries also recorded negative scores: Thailand (minus 0.02); Hong Kong (minus 0.21); Indonesia (minus 0.26); and India (minus 0.67).
TSB