Philippine economy forecast to contract for first time in over two decades

The Philippine economy is likely to experience the first annual contraction in more than two decades this year due to the COVID-19 pandemic before it pulls back up for a U-shaped recovery in 2021.

27, Apr. 2020

Manila Ninoy Aquino International Airport Terminal 3, Pasay, Philippines (Photo by Ina Carolino on Unsplash)
Manila Ninoy Aquino International Airport Terminal 3, Pasay, Philippines (Photo by Ina Carolino on Unsplash)

HANOI, VNA – The Philippine economy is likely to experience the first annual contraction in more than two decades this year due to the COVID-19 pandemic before it pulls back up for a U-shaped recovery in 2021.

Key cities in the Philippines, which is among the fastest growing economies in Asia during the pre-pandemic period, are under strict quarantine measures since mid-March, according to Reuters.

In a statement on April 25, Governor the country’s central bank Benjamin Diokno said the Philippines’ gross domestic product would likely shrink by 0.2 percent in 2020 before bouncing back to about 7.7 percent thanks to policy support measures.

That would mark a sharp reversal from the government’s initial annual growth target of between 6.5 percent and 7.5 percent for 2020 to 2022.

He said the economic recovery would follow a U-shaped path in 2021, following a slowdown in the first quarter and contractions in the next two quarters of this year.

On April 24, Philippine President Rodrigo Duterte extended a strict lockdown in the capital Manila and key cities until May 15 in an effort to contain the spread of the coronavirus, which has so far infected 7,192 people and killed 477 in the country. - VNA