World Bank forecasts PH economy to grow 3.0% in 2020

The World Bank forecasts Philippine economic growth to decelerate to 3.0% in 2020, a significant downgrade from its January projection of 6.1%, due to the impact of the COVID-19 pandemic and community quarantine measures.

In a worst-case scenario, the Philippine economy might contract by 0.5% in 2020, with a potential recovery to 4.1% growth in 2021.

The baseline forecast assumes a slow return to normal business operations by the third quarter of the year.

Lockdowns have frozen trade and commerce worth about 70 percent of the Philippines' gross domestic product.

Factors contributing to the downgraded outlook include production limitations, a drastic slowdown in domestic consumption and investment, delays in public infrastructure programs, and postponement of private sector investments.

Exports of goods and services, as well as remittances from Filipinos abroad, are also expected to be affected by global travel restrictions and outbreaks in countries with a large Filipino workforce.

Despite the downgrade, the Philippine economy is still projected to be the third-fastest growing economy in the East Asia and Pacific region in 2020, behind Lao PDR and Vietnam.

The World Bank's projections for 2021 and 2022 anticipate a rebound, with growth seen picking up to 6.2% in 2021 and accelerating to 6.4% in 2022.