The country’s top economist said there is no sign yet of recovery in the near future as the government tries to grapple with the debilitating effects of the coronavirus disease 2019 (COVID 19).
Acting Socioeconomic Secretary Kendrick Chua made the gloomy outlook amid efforts by authorities to gradually ease quarantine restrictions and slowly reopen the economy.
The government is contemplating on further relaxing the grip on business operations and social mobility for a speedy recovery.
However, cases of CoVid 19 and the number of deaths attributed to the disease alarmingly jumped early this month as establishments of selected industries opened and many returned to work under the quite tolerable General Community Quarantine (GCQ).
Despite the GCQ, Chua expects the gross domestic product (GDP) for the second quarter to be “worse” than the first quarter.
“Recovery is very uncertain,” Chua said.
As this developed, a study by UK-based think tank Oxford Economics said the Philippine economy could contract by five percent this year due to the extent of lockdowns and the impact on tourism.
The economic research firm said the coronavirus pandemic delivers the largest shock to the five largest economies in the ASEAN region—Philippines, Indonesia, Malaysia, Thailand, Singapore–since the 1997 Asian financial crisis.
Declines in economic output is seen to be steeper in the Philippines (-5.0 percent), Thailand (-5.7 percent) and Singapore (-6.0 percent).
“On the domestic front, countries with more stringent lockdowns and a higher share of discretionary spending are likely to take a heavier toll. On the external front, a heavily trade-dependent economy such as Singapore and economies with large tourism sectors, notably Philippines and Thailand, will be hard hit,” the study said.
While the policy responses in these economies have been strong, the room for further rate cuts is narrow for some due to financial risks, it added.
The firm pointed do out that “progress in virus containment and policy space will influence the speed of economic rebound.
Meanwhile, Chua remained confident on the economy’s capacity to survive. He said it can have clearer direction if the government will proactively implement the recovery program it started and the 18 million poor families get support to receive social amelioration and 3.4 million small business employees get their wage subsidy.