The Philippine economy will likely decline 2.2 percent this year after President Rodrigo Duterte decided to extend the enhanced community quarantine in major areas in Luzon by another 15 days, or until May 15, an economist from the local unit of Dutch financial giant ING Bank said Friday.
“The extension of the lockdown coupled with the loss of remittance support and a meager fiscal response all but scuttles any hope for growth in the second quarter. This development forces us to drop down our expectations for growth this year with full-year 2020 GDP hitting a worst-case scenario level of -2.2 percent,” ING Bank Manila senior economist Nicholas Antonio Mapa said in a message to Manila Standard.
“Economic data reported recently and in the coming weeks will show further symptoms of the impending economic malaise ahead. Brace for economic impact,” Mapa said.
Mapa said he was “awaiting an increase in fiscal spending to match the almost four-week extension to the original ECQ.”
Bangko Sentral ng Pilipinas Deputy Governor Francisco Dakila earlier said remittances would likely decline this year by 0.2 to 0.8 percentage points because of the pandemic.
Money sent home by Filipinos working overseas rose 4.1 percent in 2019 to an all-time high of $30.133 billion from $28.94 billion in 2018.
The original month-long enhanced community quarantine in Luzon was supposed to end on April 12, but the government decided to extend it to April 30. Following a meeting with the Inter-Agency Task Force, President Rodrigo Duterte extended for the second time the quarantine period until May 15 in the National Capital Region, Calabarzon, Central Luzon and a few provinces in Luzon where there are high number of infections.
The move aimed to effectively contain the spread of the disease that already claimed the lives of hundreds of individuals in the country.
Meanwhile, the Management Association of the Philippines urged businesses to take advantage of the extended ECQ to prepare and set up health protocols in the workplace.
“Business should take advantage of the extended period to work on their health protocols in preparation for the eventual lifting of the lockdown, which hopefully will happen sooner or later,” MAP president Francisco Lim said.
“This is essential as there will be a new normal in the workplace until a vaccine and cure are out in the market, which will take months or even years to happen,” Lim said.
Lim said he was supporting the extension of ECQ in Metro Manila to prevent the spread of the virus. “It is a necessary evil. We need it for the country to do massive testing at the grassroots level and better prepare our healthcare system,” Lim said. With Jenniffer B. Austria