COVID-19 lockdown to slow PH economic growth to 4.5%

Capital Economics forecasts the Philippines' economic growth to slow to 4.5 percent in 2020 due to restrictions on travel to and from Metro Manila to curb the COVID-19 outbreak.

The lockdown of the capital region from March 12 to April 14 could weaken growth to below 6% in the first quarter, according to ING Bank economist Nicholas Mapa.

The Bangko Sentral ng Pilipinas (BSP) is now expected to implement a substantial 50 basis point cut to key interest rates during its monetary policy meeting on March 19.

The Philippine Stock Exchange Index dropped by more than 11% early Friday, and the peso fell for a third straight day.

Consumption is expected to bear the brunt of the slowdown, with restricted movement for Filipinos and curfews in effect.

Economic Planning Undersecretary Rosemarie Edillon stated that the virus could shave as much as 1 percentage point off the government's GDP growth forecast of 6.5%-7.5% for the year.

To support the equities market, the Government Service Insurance System and the Social Security System were instructed to at least double their daily average purchase of stocks.

The government also imposed a 60-day freeze on prices of basic goods in Metro Manila.