[ad_1]
MANILA, Philippines – The Philippines’ return to pre-pandemic economic growth levels will take longer than expected, and next year’s expansion is likely to continue to be limited by downside risks, including challenges to vaccine distribution. against coronavirus.
Thus concluded economists and investment managers who spoke in an online forum organized by the Inquirer, and were of the opinion that the recovery of the country’s gross domestic product (GDP) would come in the form of a “dirty L”, which resembles a mark of surface trajectory verification. rather than the V- or U-shaped recovery that government planners previously predicted.
“The first hopes of a rapid rebound in 2021 have been frustrated by losses and business closures, high unemployment and the continuing spread of the coronavirus that has made it impossible to completely relax the quarantine and distancing rules,” according to the economist and former undersecretary of finance Romeo Bernardo. in a Global Source Partners article that he co-authored with Marie Christine Tang.
“While the government is striving to ‘allay fear’ and change the gloomy sentiments of consumers and businesses to revive the economy, we believe it will be a slow ascent for the economy and GDP is projected to grow only 5 percent. in 2021, returning to its 2019 level. level only at the end of 2022, “he said.
Global Source Partners expects the Philippine economy to contract 9.8 percent this year, saying the economic recession resulting from the government-imposed lockdown to combat the pandemic “is proving much more fearsome beyond an ongoing health problem.” .
Bernardo said that short-term growth expectations come with “considerable downside risks” due to challenges in sourcing vaccines from foreign manufacturers, while current distribution constraints likely mean the country would have to live with COVID. -19 “much longer than before. Anticipated.”
‘Crash landing’
Meanwhile, ING Bank Manila country manager Hans Sicat outlined the recent performance of the Philippine economy, with output declining 16.5 percent in the second quarter and slightly improving to a contraction of 11, 4 percent in the third quarter, as a “hard landing.”
He added that the trajectory of the recovery would be shallower than previously predicted and would average 3.7 percent in the short term, rather than the 5.6 percent growth rate that would normally characterize a sharper recovery. V shape that politicians expected.
“It’s not a V, it’s not a U,” Sicat said, describing the shape of the recovery. “In fact, we are using a different letter. It’s what we call a ‘dirty L’. It’s not exactly a ‘swoosh’. “
BDO Capital and Investment Corp. Chairman Eduardo Francisco expressed a more optimistic tone, saying that publicly traded corporations would likely see an average 52 percent rebound in earnings in 2021, as a result of an average decline in earnings. net income of 41 percent this year.
“We are a bit more optimistic about GDP [growth], “he said.” We expect 6.9 percent growth and I hope so. “
Other banking experts also noted that even with coronavirus vaccines now on the horizon, it may take the Philippines by mid-2022, at the earliest, to return to the same level of economic productivity seen before the current pandemic dragged down what it once did. It was Southeast Asia. better performance.
Pump priming needs
Security Bank projects that GDP will grow 7.1 percent in 2021 and 5.3 percent in 2022.
But even with the growth rate observed next year, Security Bank executive vice president and treasurer Raúl Martín Pedro said that nominal GDP would be P18.69 trillion compared to the P19.37 trillion size of the economy in 2019.
“We won’t get there until the middle or second half of 2022,” Pedro said during an economic forum that Security Bank recently held for its clients.
In a separate briefing, National Bank of the Philippines economist Alvin Joseph Arago said that third-quarter GDP results showed a slower than expected recovery, suggesting that it could take until the third quarter of 2022, as very soon, to reach the P4.8- trillion GDP quarterly production. As such, it expected Bangko Sentral ng Pilipinas (BSP) to keep interest rates low until the first half of 2022.
GNP sees a full-year GDP decline of 8.9 percent this year, followed by growth of 5 percent in 2021 and 6 percent in 2022.
Pedro said that BSP policy rates will likely remain stable for the next two quarters, allowing the economy to recover. Citing the latest mobility data from Google and Apple, he noted that mobility in the national economy through the movement of mobile phones was still 40 percent below pre-pandemic levels.
“There is still a lot to do,” he said.
As for the local financial system, Pedro said that the banks had a surplus of cash that could easily finance the pumping needs of the national government for the next year. INQ
For more news on the new coronavirus, click here.
What you need to know about the coronavirus.
For more information on COVID-19, call the DOH hotline: (02) 86517800 local 1149/1150.
The Inquirer Foundation supports our healthcare leaders and still accepts cash donations to be deposited into the Banco de Oro (BDO) checking account # 007960018860 or donate through PayMaya using this link .
Read next
Subscribe to INQUIRER PLUS to get access to The Philippine Daily Inquirer and more than 70 other titles, share up to 5 gadgets, listen to the news, download from 4am and share articles on social media. Call 896 6000.
[ad_2]
