The Asian Development Bank (ADB) has downgraded its forecast for the Philippines this year, as it sees the economy contracting by 8.5 percent, data posted in its latest report showed.
The new growth forecast, presented yesterday in a regular supplement to the Asian Development Outlook 2020 Update, showed that the projection was revised from the earlier outlook of a decline of 7.3 percent, as reported in September.
The ADB’s latest outlook also shows that among its forecasts for various economies in its report, the Philippines will post the sharpest decline for the year.
Among Southeast Asian economies alone, the ADB expects Thailand, Singapore, Malaysia and Indonesia to post contractions of 7.8 percent, 6.2 percent, six percent and 2.2 percent, respectively, while Vietnam is seen to grow 2.3 percent.
“The gross domestic product (GDP) forecast for 2020 (for the Philippines) is downgraded to 8.5 percent contraction because household consumption and investment have fallen more than expected,” the report said.
“The forecast for 2021 is maintained at 6.5 percent growth, assuming that public investment picks up and the global economy recovers,” it added.
The ADB said the GDP forecast for Southeast Asia is revised down, from 3.8 percent contraction to a decline of 4.4 percent in 2020, and from 5.5 percent growth to 5.2 percent in 2021.
“GDP forecasts in 2020 are downgraded for Indonesia, Malaysia and the Philippines as COVID-19 containment hampers economic recovery,” the report said.
Economic output in developing Asia, a group of 45 nations in the Asia-Pacific, is seen to shrink 0.4 percent this year, the ADB said short of its earlier estimate of a 0.7 percent decline.
This year’s expected decline would be the region’s first in nearly six decades.
For 2021, the region is still forecast to recover and grow 6.8 percent, the ADB said, as Asian economies gradually recover from the COVID-19 pandemic that has infected nearly 68 million people and killed more than 1.5 million.
Southeast Asia remains under pressure, as virus outbreaks and restrictions continue in countries such as Indonesia, Malaysia, and the Philippines, prompting the ADB to downgrade its 2020 and 2021 growth forecasts for the sub-region.
Southeast Asia faces a bleaker outlook with this year’s economic output seen to suffer a deeper slump of 4.4 percent, before growing 5.2 percent next year, down from an earlier forecast for 5.5 percent growth.
Meanwhile, Michael Gerard Enriquez, chief investments officer of Sun Life of Canada Philippines Inc., said in a virtual briefing yesterday the Philippine economy could contract by 8.8 percent for the year.
“This implies about 5.7 percent contraction for the fourth quarter and this has been driven by the absence of spending, especially consumer spending which was greatly hampered because of the lockdown,” Enriquez said. (With Reuters)