BDO Unibank’s Trust Group is expecting the country’s gross domestic product (GDP) to contract by of 9.6 percent in the third quarter and by 6 percent contraction in the last quarter to bring its full year 2020 GDP projection to negative 8.3 percent.

BDO Chief Investment Officer Frederico Ocampo said during an episode of Market Sense, a monthly webinar series organized by the BDO Trust Group, the country is poised for a recovery of 6.6 percent in 2021, as more government spending enters the economy.

“(Government spending) would allow the economy to recover, and that would be the 2021 story,” he said.

Ocampo noted that, “We're facing a recession, which could be the deepest in 35 years. Therefore, the growth drivers were hurt a bit, especially consumer demand, which is 72 percent of the economy, as well as investments from large local corporates and SMEs. But as the economy slowly opens up once again, you'll see those drivers bouncing back.”

He expressed belief that the Philippines can stand out once again in the global stage, anchored on the country’s young population.

“The Philippines had 21 consecutive years of economic expansion, surpassed only by Australia. That is a testament to the resiliency and strength of the Philippine economy. While the growth drivers were hurt during the pandemic, the strengths of the Philippine economy remained intact. For instance, our young population is still there,” Ocampo stressed.

He added that, “In a pandemic, you could see the value of that young population in terms of adaptability to the digital economy, in terms of proficiency in the use of the internet. Later on, these young population, many of them would be creating their own companies and become entrepreneurs. Many jobs were lost during this pandemic. To cope, our young population would be creating their own companies.”

Despite the fact that economic growth and activity have slowed down as a result of the persisting COVID-19 pandemic, economist and Marikina (2ndDistrict) Rep. Stella Luz Quimbo said government spending should still continue to fast track economic recovery.

Also during the webinar, Quimbo said government needs to spend even in the midst of a crisis in order to boost confidence levels of the public, especially businesses.

"In a bad economic crisis, confidence level is very low—confidence of consumers, confidence of your workers. Everyone's afraid. Fear and anxiety have set in. Even business owners, they don't want to invest. In fact, they'd rather close shop. So this is a situation where government must step in. If the government is not spending enough, then our confidence will be deflated," Rep. Quimbo said. She added that, "We need government to spend because there's a lot of market failures arising from the pandemic," she added.