The Philippine economy likely contracted by 2.5 percent in the second quarter from a year ago, deeper than the 0.2-percent decline in the first quarter, on the debilitating impact of the coronavirus pandemic, according to Moody’s Analytics, a financial intelligence firm that operates independently of credit rating agency Moody’s Investors Service.
The projection was contained in the Asia-Pacific Economic Preview released by Moody’s Analytics this week. It did not provide further details and explanation on the projection.
The government is scheduled to release the second-quarter GDP data on Thursday. GDP contracted by 0.2 percent in the first quarter amid the pandemic and following the Taal Volcano explosion in January.
This was a reversal of the 5.7-percent growth a year ago, and the 6.4-percent expansion in the fourth quarter of 2019.
Most economists predicted that the second-quarter contraction could be deeper because the lockdowns implemented by the government to contain the spread of the disease encompassed almost the entire period.
The bleak outlook compelled the interagency Development Budget Coordination Committee to forecast a 2 percent to 3.4 percent contraction for the whole 2020.
The DBCC expects the GDP to recover next year with a growth of 8 percent to 9 percent on expectation that the pandemic would be over by then.
Bangko Sentral ng Pilipinas Governor Benjamin Diokno said last week that an economic contraction of more than 20 percent in the second quarter would mean many problems for the country.
Diokno, however, did not give any forecast for economic growth in the April to June period, saying it would be best for everyone to wait for the release of the important data.
“What I can say is that if it is a single-digit decline [in the second-quarter GDP], that is nice… But if that is higher than 20 percent, that is problematic,” Diokno said.
He said a second-quarter contraction of a little more than 10 percent would remain “tolerable.”