Inquirer
Fitch Solutions slashes growth forecast for PH to 6%
Fitch Solutions has downgraded the Philippine economic growth outlook for 2020 to 6.0% from 6.3% due to the impact of the COVID-19 outbreak.
This revised forecast remains below the government's target of 6.5% to 7.5%, and is a slight increase from last year's eight-year low of 5.9%.
The exports sector, particularly tourism, is expected to face significant challenges, alongside potential delays in infrastructure projects and weakened remittance inflows for households.
A major risk to this forecast includes a sudden increase in domestic COVID-19 cases or a more prolonged negative impact on external demand.
The Philippine government has committed to ramp up fiscal spending by 12 percent this year, alongside a roll-over of unused funds from the 2019 budget, ensuring a significant boost from fiscal stimulus.
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The COVID-19 outbreak is expected to impede the Philippine economy's growth potential in the first quarter due to a significant decline in tourist arrivals, particularly from China.
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The Philippine economy could lose up to 1 percentage point from its GDP growth if the COVID-19 outbreak persists for a year, according to Socioeconomic Planning Secretary Ernesto M. Pernia.
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Trade Secretary Ramon Lopez remains optimistic that the Philippines' export sector will still achieve positive growth despite potential slowdowns caused by the coronavirus outbreak.
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The Asian Development Bank (ADB) estimates that the coronavirus outbreak could lead to the loss of up to 252,000 jobs and a decline in GDP ranging from $669 million to $1.939 billion in the Philippines.
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Bangko Sentral ng Pilipinas (BSP) Governor Benjamin Diokno remains optimistic that the Philippine economy will achieve 6% growth in 2020, despite the global threat of the coronavirus disease (COVID-19).
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