Recovery of the Philippine economy is projected to start in the third quarter of 2020 with easing of movement restrictions which provided a leeway for more economic activities.
In the June 2020 issue of The Market Call jointly done by the First Metro Investment Corporation (FMIC) and the University of Asia and the Pacific (UA&P), the report attributed rosier forecast for the economy to easing of the community quarantine particularly in Metro Manila, Region 3, and Region 4-A, along with the drop in the number of deaths.
Mainland Luzon was placed under an enhanced community quarantine (ECQ) from March 17 until May 15. This quarantine level was extended for Metro Manila until the end of May as cases remained high.
To date, Metro Manila, among other areas, is under a general community quarantine (GCQ) status.
The report said Metro Manila, along with the areas of Cavite, Laguna, Batangas, Rizal and Quezon (Calabarzon), as well as Central Luzon account for about 62 percent of the country’s gross domestic product (GDP).
“We see mid-August as a key to determining the speed of economic rebound as GDP numbers for Q2 (second quarter) come out, a new PHP1.3-trillion stimulus package gets approved, and Covid-19 deaths drop to minimal levels. We expect positive GDP growth starting Q3,” it said.
Growth, as measured by GDP, posted a 0.2-percent contraction in the first quarter this year, the first negative output since the last quarter of 1998.
The report said as quarantines are eased, more workers were allowed to go back to work although this supposed positive development is hampered by the limited operations of the public transportation system.
“Improving restoration of supply chains and freight transport services should keep food prices at bay and largely offset the recent spike in crude oil prices,” it said.
Meanwhile, the report expects inflows from overseas Filipino workers (OFWs) to decline due in part to the fact that some OFWs lost their jobs.
“We believe (the) inflow of remittances will remain bleak in the coming months, with bigger declines that could be seen at the height of the lockdowns from April to May,” it said.
Bangko Sentral ng Pilipinas (BSP) data show that cash remittances in the first quarter this year grew by 1.4 percent year-on-year to USD7.4 billion.
This growth is lower than the 4.6-percent growth as of February and the 6.6 percent last January.
For March alone, cash remittances contracted by 4.7 percent from a 2.5 percent last February and 6.6 percent last January.
Philippine monetary officials forecast remittances to contract by 5 percent this year.
Source: Philippines News Agency