PH economy may not return to 6% growth post-pandemic – analyst

Published by rudy Date posted on July 24, 2020

By Melissa Luz Lopez, CNN Philippines, 24 Jul 2020

Metro Manila (CNN Philippines, July 24) — The Philippines will have trouble returning to its above-6 percent growth track in the next two years in the absence of strong spending to perk up economic activity, a bank analyst said Friday.

Nicholas Antonio Mapa, senior economist at ING Bank in Manila, said the local economy may be in for a bumpy L-shaped recovery, rather than the sharp V-shaped pickup expected by President Rodrigo Duterte’s economic managers heading into 2021.

Based on Mapa’s estimates, the Philippines will have a hard time pushing growth to pre-pandemic levels in the absence of aggressive fiscal stimulus meant to encourage consumer spending and business reopenings, especially as consumption drives most of the local economy.

The fear of getting infected has kept activity muted, with malls nearly empty and restaurants barely filled despite relaxed rules. To add to that, remittances from overseas Filipinos –– which support the spending for needs and wants of their relatives here –– have plunged and are unlikely to quickly return to previous levels as thousands of migrant workers fly home.

ING sees remittances down by a tenth to $27.1 billion this year, larger than the central bank’s projected 5 percent fall.

Mapa expects a steady contraction for the rest of 2020, with the biggest slump at 6.3 percent from April-June after the first quarter’s surprise 0.2 percent slump. The economy is expected to shrink by 5.8 percent in the third quarter and by 3.5 percent in the fourth quarter before returning to positive territory in January-March next year.

The government projects a contraction of at least 2 percent to as wide as 3.4 percent this year, while international observers brace for an even deeper recession.

The economy may bounce back come 2021, but only at a peak of 5.8 percent by July-September next year, Mapa said. This is well below the government’s 8-9 percent full-year forecast.

The government must swoop in with a “sizeable” spending plan to save the day, the ING economist added, with a bigger budget for income replacement and similar moves to revive consumption better for an economic revival.

Mapa backed the ₱1.3-trillion stimulus package approved by the House of Representatives in June called the Accelerated Recovery and Investments Stimulus for the Economy or ARISE bill, saying it’s a good place to start to revive activity and demand. However, Acting Socioeconomic Planning Secretary Karl Chua said this isn’t “fundable,” while Finance Secretary Carlos Dominguez III earlier said he’s not keen on pouring all aid in one go.

“There is a danger that you lose the war on the first battle. You might not have an economy to save next year,” Mapa responded.

The bank economist pointed out that benign inflation, which settled at the low end of the central bank’s 2-4 percent target range, is another sign of a “depressed economy.” He added that the Bangko Sentral ng Pilipinas already did the heavy lifting by cutting interest rates, so it’s time for fiscal authorities to do their part.

July 2025

Nutrition Month
“Give us much more than P50 increase
for proper nutrition!”

Invoke Article 33 of the ILO Constitution
against the military junta in Myanmar
to carry out the 2021 ILO Commission of Inquiry recommendations
against serious violations of
Forced Labour and Freedom of Association protocols.

Accept National Unity Government (NUG)
of Myanmar.  Reject Military!

#WearMask #WashHands #Distancing #TakePicturesVideosturesVideos

Time to support & empower survivors. Time to spark a global conversation. Time for #GenerationEquality to #orangetheworld!

July


3 July – International Day of Cooperatives
3 Ju
ly – International Plastic Bag Free Day
 
5 July –
World Youth Skills Day 
7 July – Global Forgiveness Day
11 July – World Population Day 
17 July – World Day for
International Justice
28 July – World Nature Conservation Day
30 July – World Day against Trafficking in Persons 


Monthly Observances:

Schools Safety Month

Nutrition Month
National Disaster Consciousness Month

Weekly Observances:

Week 2: Cultural Communities Week
Micro, Small, and Medium Enterprise
Development Week
Week 3: National Science and
Technology Week
National Disability Prevention and
Rehabilitation Week
July 1-7:
National Culture Consciousness Week
July 13-19:
Philippines Business Week
Week ending last Saturday of July:
Arbor Week

 

Daily Observances:

First Saturday of July:
International Cooperative Day
in the Philippines

Categories

Lorem ipsum dolor sit amet, consectetur adipiscing elit. Ut elit tellus, luctus nec ullamcorper mattis, pulvinar dapibus leo.