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Philippines seen to contract by 6% from July to September
MANILA, Philippines — The Philippine economy contracted for the third straight quarter with the gross domestic product (GDP) shrinking by six percent from July to September as mobility restrictions were extended due to rising COVID-19 cases, according to Moody’s Analytics.
In its latest Asia Pacific economic preview, the research arm of Moody’s Investors Service said COVID-19 caseloads in the country continued to accelerate in the third quarter, resulting in the extension of conditional restrictions.
“The surge in domestic cases is expected to have dampened the revival in domestic demand, giving rise to another quarter of contraction,” Moody’s Analytics said.
Despite imposing the longest and strictest lockdowns in the world, COVID-19 cases in the Philippines are nearing 400,000 with close to 7,600 deaths.
“The Philippines’ economy contracted sharply during the June quarter as the strict lockdown weighed heavily on domestic investment and consumption, while exports plunged by 40 percent,” Moody’s Analytics said.
Last October, Moody’s Analytics chief economist for Asia Pacific Steven Cochrane said the country’s GDP would likely contract by 9.5 percent in the third quarter and four percent in the fourth quarter.
As a result, Cochrane said the research arm expects a steeper economic contraction, with GDP shrinking by 9.2 percent this year.
The economist pointed out the Philippines is on its way to a stronger recover with a GDP growth of 7.8 percent for next year.
However, Cochrane said real GDP would not exceed its peak in the fourth quarter of 2019 until the second quarter of 2022 due to the depth of the downturn caused by the long and very strict community quarantine orders in much of the country, and due to the modest fiscal support that so far has been pledged by lawmakers to support the economy and rebuild.
Source: https://www.philstar.com/business/2020/11/10/2055720/philippines-seen-contract-6-july-september