In the worst case, PH 2020 GDP fell at the fastest rate since 1985

MANILA, Philippines – The country’s economic managers have projected that the gross domestic product (GDP) will contract year-over-year during the four quarters of 2020 to bring the annual contraction to 2-3.4 percent.

This was the last projection of the Cabinet-level Development Budget Coordination Committee (DBCC), which met on Tuesday to review macroeconomic assumptions and objectives in light of the COVID-19 pandemic.

In a statement Wednesday, the Department of Budget and Management (DBM), which chairs the DBCC, said estimates by the state planning agency National Authority for Economy and Development (Neda) had shown potential production losses of about P2. 4 trillion or 9.4 percent of GDP this year, as the national and global economy faced not only health but also the socioeconomic consequences caused by the disease.

Budget Secretary Wendel E. Avisado told the Investigator that the DBCC’s full-year GDP projection was based on expectations that nominal GDP during the first and fourth quarters would decrease.

At the most optimistic end of the DBCC’s projection of a 2 percent GDP contraction, 2020 would be the first time since the 1998 3 percent annual decline that the Philippines will experience a recession.

In 1998, the Philippines recovered from the 1997-1998 Asian financial crisis, as well as the drought due to El Niño, and despite being an election year in which former President Joseph Estrada catapulted himself to the highest position in the country.

But in the worst-case scenario of a 3.4 percent economic contraction in 2020, the Philippines’ GDP would fall at its fastest rate since 1985.

GDP figures provided by national statistician Claire Dennis B. Map to Researcher last week showed that the Philippine economy also declined 0.4 percent in 1991, during the Corazon Aquino presidency, as the country dealt with the crisis energy that had resulted in “blackouts” throughout the country, in addition to the consequences of the Gulf War; and in 1984 and 1985 at 7% and 6.9%, respectively, the last years of the Fernando Marcos dictatorship struggling with a debt crisis before he was expelled from Malacañang through the peaceful Edsa Revolution of People’s Power in 1986.

JPV

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