December 10th local time, the Asian Development Bank (ADB) released the updated report of Asian Development Outlook. In the report, the Asian Bank lowered its economic forecast for the Philippines for 2020, and the Philippine economy is expected to shrink by 8.5% this year.
Earlier, in September this year, the ADB forecast that the Philippine economy would shrink by 7.3%.
The Asian Bank said that the lowering of economic expectations for the Philippines was mainly due to the impact of the coronavirus epidemic, and the decline in household consumption and investment in the Philippines exceeded previous expectations.
The ADB noted that the Philippine economy contracted by 10.0% between January 2020 and September 2020, reflecting the disruption of business activity and the weakening consumer confidence during the pandemic.
Although the decline in household consumption has slowed down with the gradual recovery of the economy and the rebound of remittances from Filipino overseas workers, the decline is still significant, with a decline of 15.3% in the second quarter and 9.3% in the third quarter.
In addition, the decline in investment has further expanded, from a decline of 36.5% in the second quarter to a decline of 37.1% in the third quarter. At the same time, the unemployment rate is also high, reaching 10.0% in July and 8.7% in October. The ADB expects the Philippines’ economy to remain negative in the third quarter, with a negative 11.5% growth rate.
The forecast of the Asian Bank is basically consistent with that of the Philippine government, which has said that the Philippine economy is expected to shrink by 8.5% to 9.5% this year due to the coronavirus epidemic and strict quarantine measures.
Karl Chua, acting Minister of the National Economic and Development Agency of the Philippines (NEDA), said earlier that the key to economic recovery is to promote further economic opening up and expand the source of income.
The Philippines has been implementing quarantine measures to curb the spread of the epidemic since March. As of now, nearly nine months, the capital Metro Manila and other major areas are still in place with the general community quarantine policy (GCQ) and will continue until the end of this year.