Philippine Economy Predicted to Contract Sharply in 2020

Philippine economic managers predict a contraction of 2% to 3.4% for 2020, marking the first full-year decline since 1998 and the steepest since 1985.

The Development Budget Coordination Committee (DBCC) revised its earlier forecast from -1% to zero growth due to the impact of COVID-19 on domestic demand and investments.

The worst-case scenario projects a contraction of 3.4%, which would be a significant drop from the 6% growth recorded in 2019.

NEDA estimates potential economic losses could reach PHP2 trillion or 9.4% of GDP, highlighting the severe impact of the pandemic on both domestic and global economies.

Despite this contraction, economists like Ricafort remain cautiously optimistic due to the country's low debt-to-GDP ratio, high foreign reserves, and intact investment-grade credit ratings.

The government plans to increase fiscal stimulus measures while maintaining a manageable budget deficit of 8.1% of GDP.