MANILA, September 15 — The Philippine economy is forecast to contract by 7.3 per cent in 2020 amid the Covid-19 pandemic before growth returns to 6.5 per cent in 2021, reported Xinhua news agency based on a new report from the Asian Development Bank (ADB) released on Tuesday.
The Asian Development Outlook (ADO) 2020 Update projects a deeper decline in the Philippines’ economy than ADB’s June forecast of 3.8 per cent contraction, with subdued private consumption and investment expected for the rest of the year and uncertainties about the global economic recovery.
The economy is expected to rebound in 2021 as the outbreak is contained, the economy is further opened, and more government stimulus measures are implemented. Downside risks next year include a slower-than-expected global recovery that could weigh heavily on trade, investment and overseas Filipino worker remittances.
The ADB has so far provided about US$2.3 billion in loans and grants to support the government’s urgent Covid-19 response, including social protection and livelihood support to help mitigate the impacts on livelihoods and employment and assistance to further scale up the government’s health response against the pandemic.
The report revised the Philippines’ inflation forecasts to 2.4 per cent in 2020 and 2.6 per cent in 2021, compared with the April projections of 2.2 per cent and 2.4 per cent, respectively, as global oil prices stabilise.
The forecasts are within the Philippine central bank’s target range of 2.0 per cent to 4.0 per cent, with monetary policy likely to continue to help the economy’s rebound from the pandemic. — Bernama