PH economy to contract by up to 3.4%, higher debt seen in 2020
The Development Budget Coordination Committee (DBCC) said on Wednesday, May 13, that the pandemic's impact on the economy could reach P2 trillion or around 9.4% of gross domestic product (GDP).
While the country is diving into a recession in 2020, growth for 2021 is seen to soar by 7.1% to 8.1%, assuming that a well-targeted recovery program, alongside efforts of the private sector, would mitigate the pandemic's impact.
Revenue collection for this year has been revised to P2.6 trillion or 13.6% of GDP, lower by 17.7% than the earlier assumption of P3.17 trillion approved by the DBCC last March.
Disbursements are estimated to reach P4.18 trillion, 21.7% of GDP. This slightly exceeds the program approved in March by P12 billion or 0.3% of GDP.
The revised disbursement program takes into account the releases for COVID-19 initiatives charged to savings coming from austerity measures, among others.
With the revised revenue and disbursement programs, the budget deficit for 2020 is projected to reach P1.56 trillion or 8.1% of GDP. This is 2.8 percentage points higher than the initial estimate of 5.3% of GDP announced last March. (READ: What we know so far: Funding the fight vs coronavirus)
"The DBCC maintains that the debt level remains manageable, especially as the Philippines enjoyed its lowest recorded debt-to-GDP ratio of 39.6% last year," the DBCC said.
Debt-to-GDP ratio is expected to hit around 50%, still lower than the peak of 71.6% in 2004.
For 2021 to 2022, export growth is expected to recover to 5%, while imports are projected to bounce back to 8%. – Rappler.com