Economic growth likely slowed to 1.8 percent in the first quarter of 2020, significantly down from a 6.4-percent expansion a quarter ago, as the onslaught of the coronavirus 2019 pandemic heavily impacted global trade, Moody’s Analytics said Monday.
“Philippine GDP is expected to have grown by 1.8 percent y/y in the March quarter, following a 6.4-percent expansion in the December quarter, as the economy starts to feel the impact from a visible slowdown in external demand,” Moody’s said in its Asia-Pacific Economic Preview published May 1.
The government is set to announce the first-quarter GDP data this week.
Despite the imminent slowdown in the January-to-March period, Moody’s projection showed the Philippines’ expansion would still be better than the -2 percent of Indonesia and -6.5 percent of Hong Kong.
“The COVID-19 outbreak has ravaged Europe and the US, dealing a heavy blow to production and consumption, with several economies going under lockdowns. The worst is far from over, especially for the US, as the casualties from the pandemic touched new highs in recent weeks,” Moody’s Analytics said.
The GDP grew 6 percent in 2019, the low end of the target range of 6 percent to 7 percent, despite the delay in the approval of the P3.7-trillion national budget.
The government in latter part of 2019 set a 6.5– to 7.5-percent expansion for 2020, but the COVID-19 pandemic compelled both public and private economists to say the forecast will likely be missed, with some even projecting a nearly flat growth this year.
Over the weekend, Finance Secretary Carlos Dominguez III said the Philippines was in a better position to weather the impact of the coronavirus 2019 pandemic because of its fiscal and economic strength.
Dominguez issued the statement after The Economist ranked the Philippines sixth among selected emerging economies in the world, and the best among those ranked from the Southeast Asian region.
“This assessment shows that improving our revenue flows through our tax reform program, being judicious with expenditures and investments, and maintaining a well-balanced debt management strategy are serving the country well,” Dominguez said.
He said the country had the confidence of the international community which would go a long way in helping the government finance its COVID-19 response measures.
He said the same confidence would also help the country attract investments and create jobs on its road to recovery.
“While COVID-19 may be an unprecedented global crisis, the Philippines is better positioned to overcome this situation than at any other time in recent history,” he said.
He said President Rodrigo Duterte’s commitment to a conservative approach to economic policy has brought an average of 6.4 percent GDP growth over the past three years and a sovereign credit rating of “BBB+,” the highest in the country’s history.
“This strong vote of confidence in the country’s fiscal and economic management encourages the Duterte administration to continue on its path of prudent macroeconomic and fiscal management,” he said.
