The inter-agency Development Budget Coordination Committee (DBCC) expects deeper economic contraction this year due to community quarantine measures amid the COVID-19 crisis.
Following the DBCC’s meeting late Thursday, the economic managers adjusted its gross domestic product (GDP) assumption for the year to -8.5 percent to -9.5 percent from an earlier range of -4.5 percent to -6.6 percent set last July.
“The emerging GDP growth rate assumption for 2020 has been adjusted… following the prolonged imposition of community quarantines in various regions in the country,” Budget Acting Secretary Wendel E. Avisado said.
Despite deeper economic woes, Avisado said the DBCC sees the local economy would “bounce back” in 2021, growing by about 6.5 percent to 7.5 percent.
By 2022, the DBCC forecasted the economy to expand at a much faster pace of 8.0 percent to 10 percent.
“We have revised macroeconomic assumptions and targets to take into account recent positive developments that will help propel the Philippine economy to a strong recovery starting 2021,” Avisado said.
“These developments include our gradual recovery, the better-than-expected performance of the main revenue collection agencies, improvements in the employment situation compared to the peak of community quarantine restrictions, and the likely passage of key economic recovery bills,” he added.
In 2020, the Philippines suffered a sharp economic contraction, the worst outturn in 35 years.
In the second-quarter, the country’s GDP suffered a record 16.9 percent decline, but posted a softer contraction in third-quarter at 11.5 percent.
“We are also expecting further improvement in our fourth quarter GDP numbers. As we carefully and proactively manage the risks, a strong economic recovery and solid growth remains within our reach,” Avisado said.