The Philippine economy could shrink by 9.9 percent this year before bouncing back in 2021, a local bank executive said on Thursday.
“Our forecast for Philippine economic growth is that for full-year 2020, we’re still expecting a -9.9 percent,” Raul Martin Pedro, Security Bank Corp. executive vice president and treasurer, said at a forum.
According to him, fourth-quarter numbers would be not significantly better, since these would come from the 11.5-percent contraction of the country’s gross domestic product (GDP) in the third quarter.
“If we look at the nominal levels of economic activity, we would be hovering around P4.1 to P4.3 trillion in terms of GDP,” Pedro said.
He also said Google and Apple data showed that people’s mobile phone movement in the country were still about 40 percent of the pre-coronavirus disease 2019 pandemic level of activity.
“So with that, we believe there’s still a lot of catching up to do,” he added.
Pedro’s outlook was worse than the government’s revised assumption of a 5.5-percent GDP contraction for 2020.
It is also worse than Fitch Ratings’ -9.6 percent, S&P Global Ratings’ -9.5 percent, Capital Economics’ -9.5 percent, Bank of the Philippine Islands’ -9.3 percent, Atram Group’s 9.2 percent, Fitch Solutions and ANZ Research’s -9.1 percent, the International Monetary Fund’s -8.3 percent, the Asian Development Bank’s -7.3 percent, Moody’s Investors Service’s -7 percent, the World Bank’s -6.9 percent, Sun Life Philippines’ -6.5 percent, MUFG Bank Ltd.’s -6.3 percent, and HSBC Private Bank’s -3.9 percent.
It is, however, better than ING Bank Manila’s -10.8 percent, and compares with Rizal Commercial Banking Corp.’s -9.5 percent to -10 percent.
The Philippines remained in recession after domestic output slid by 11.5 in the third quarter, 16.9 percent in the second and 0.7 percent in the first. This brought the contraction in GDP to 10 percent in the first nine months.
For next year, Pedro said the economy was likely to rebound by 7.1 percent, or within the 6.5- to 7.5-percent growth assumption of the government.
The economy “will improve significantly in 2021… and beyond,” he said, but noted that despite his projection, the economy would not return to its pre-pandemic level.
“Not until 2022. The value [of the economy] in 2019 was P19.37 trillion as total GDP. We won’t get there at the middle or second half of 2022,” Pedro added.