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The Inter-Agency Development Budget Coordination Committee (DBCC) expects a deeper contraction of the Philippine economy this year, as it took into account the prolonged shutdowns related to the 2019 coronavirus disease (Covid-19) pandemic in the country. .
“The assumption of the emerging gross domestic product (GDP) growth rate for 2020 has been adjusted from -8.5 to -9.5 percent following the prolonged imposition of community quarantines in various regions of the country,” the Budget secretary Wendel Advised during a briefing after the 178th. DBCC meeting on Thursday.
The latest projection is broader than the panel’s previous estimate of -4.5 to -6.6 percent in July.
The country has been under lockdown since mid-March, forcing most Filipinos to stay home to avoid infection and many companies to suspend operations, especially in the first few months.
As a result, domestic production fell 0.7 percent in the first quarter, a record 16.9 percent in the second – when Metro Manila and other parts of the country were under enhanced community quarantine – and 11.5 percent in the third. This kept the country in recession and brought the GDP contraction to 10 percent in the first nine months of 2020.
Despite the revised forecast, Avisado said that the country’s economic administrators also expected fourth-quarter GDP figures to improve.
“As we manage risks carefully and proactively, a strong economic recovery and solid growth remain within our grasp,” he added.
Acting Secretary for Socio-Economic Planning Karl Kendrick Chua said available data suggested that October-December GDP could be 0.62 percentage points lower and that the full-year economic figure could be -0.17 percentage points. lower due to the La Niña phenomenon, the African swine flu and the four typhoons that hit the country in the last two months.
On the macroeconomic assumptions and DBCC targets for 2021 and 2022, Avisado said they took into consideration recent positive developments that would help propel the economy towards a strong recovery starting next year.
These “include our gradual recovery, the better-than-expected performance of the major revenue collection agencies, improvements in the employment situation compared to the peak of community quarantine restrictions, and the likely passage of key bills for economic recovery. “he added.
The budget chief also said that economic administrators expected better economic results next year as the economy gradually moves towards full reopening.
“Despite a lower projection than the one initially adopted in July 2020, further relaxation of restrictions, as we have improved the capacity of our healthcare system, will keep our economy on the right path towards full recovery. “he added.
Therefore, GDP growth is projected to rebound to 6.5 to 7.5 percent in 2021 and 8 to 10 percent in 2022. This compares with DBCC’s previous outlook of growth of 6.5 to 7.7 percent for both years.
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