Philippine economy to shrink by 1.9% in 2020, says World Bank
MANILA, Philippines – The World Bank projected the Philippine economy would contract by 1.9% in 2020, as the coronavirus crisis triggers supply and demand disruptions worldwide.
The figure is slightly better than estimates of President Rodrigo Duterte's economic managers, who see full-year gross domestic product (GDP) growth falling to -3.4% to -2%.
Before the pandemic, the World Bank had said that the Philippines' GDP was poised to be among the strongest in 2020.
In its report released on Tuesday, June 9, the Washington-based multilateral lender noted that COVID-19 infections in the Philippines and Indonesia have "not yet peaked."
The World Bank estimated that growth in East Asia and the Pacific could contract by 1.2%, which would be the first contraction since the 1998 Asian financial crisis.
The Philippines' regional peers like Vietnam (-7%), Indonesia (-5%), Malaysia (-4.3%), and Thailand (-3.4%) are projected to crash harder.
Globally, GDP growth is projected to shrink by 5.2% in 2020, the worst recession since World War II.
Steps to recovery
World Bank senior economist in the Philippines Rong Qian said in a virtual briefing on Tuesday that the Philippines must strengthen its healthcare system, reprioritize public spending, and expand social safety nets to cushion the pandemic's impact on the economy.
In the medium term, implementing the national ID system and improving the ease of doing business would be among the measures to strengthen the country's crisis response and business environment.
Qian also pointed out that the new normal would require better internet connection, but the Philippines is among the laggards in broadband penetration in the region.
"To take full advantage of this situation and help the economy in recovering from the losses it has suffered due to the lockdown, the country must ramp up its efforts to accelerate the digitalization of the economy," Qian said.
The World Bank expects Philippine GDP growth to recover to 6.2% in 2021. – Rappler.com