Amid gradually easing quarantine restrictions, economists see a narrower economic contraction in the Philippines of 7.7 percent in the third quarter even as the full-year decline in gross domestic product (GDP) was expected to be the biggest in record, think tank Japan Center for Economic Research (JCER) said.
Citing its October consensus survey of Asian economists, JCER this week said economists watching the Philippines expect third-quarter GDP to shrink at a slower pace compared to the record 16.5-percent fall in the second quarter, which pushed the country into an economic recession at the height of the longest and most stringent COVID-19 lockdown in the region.
However, the third-quarter GDP forecast in October was worse than the earlier projection of 2.7-percent decline in June.
Economists projected the fourth quarter GDP to shrink by 4.2 percent, to bring the 2020 GDP lower by 7.5 percent. The projected 2020 GDP contraction is steeper than the 7-percent drop posted in 1984, at the height of a debt crisis during the waning years of the Marcos regime.
For 2021, economists see the Philippine GDP growing by 5.9 percent, followed by a 6-percent expansion in 2022, both below the government’s 6.5-7.5 percent growth target for the next two years.
Economists polled by JCER for the Philippines’ segment in the survey were Ateneo Center for Economic Research and Development’s Alvin Ang, Bank of the Philippine Islands’ Emilio Neri Jr., BDO Unibank Inc.’s Jonathan Ravelas, Metrobank’s Pauline Revillas, Philippine Equity Partners Inc.’s Jojo Gonzales, Union Bank of the Philippines’ Carlo Asuncion, and OCBC Bank Singapore’s Howie Lee.
Also polled by JCER for other Asian countries were Barclays Bank’s Rahul Bajoria, ING Bank Philippines’ Nicholas Mapa and Nomura Singapore’s Euben Paracuelles.
In September, JCER downgraded its 2020 GDP forecast for the Philippines to a 7.7-percent drop.
JCER senior economist Akira Tanaka told the Inquirer last month that their GDP projection for the Philippines was revised from the June estimate of a 3.9-percent contraction this year.
Tanaka said the Philippines’ economic recovery “will be moderate like other Asean countries.”
“We forecast that domestic demand, like consumption in Asean-4, will be weak because lockdown still remains,” Tanaka said.