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PHL seen to post 2nd worst slump in East Asia

The Philippines is one of the worst-hit economies in East Asia, according to the World Bank. — PHILIPPINE STAR/MICHAEL VARCAS

THE WORLD BANK said the Philippine economy likely saw the second-worst slump in the developing East Asia and the Pacific region last year, due to the extended lockdowns and a prolonged coronavirus disease 2019 (COVID-19) outbreak.

In its Global Economics Prospects report published on Wednesday, the Washington-based multilateral lender kept its 2020 gross domestic product (GDP) forecast of an 8.1% contraction for the Philippine economy.

This is the second-steepest contraction among 14 developing economies in East Asia and the Pacific in the World Bank report, only better than Fiji’s estimated 19% GDP decline.

However, the World Bank forecast is smaller than the 8.5-9.5% slump expected by the Philippine government.

If realized, the World Bank’s estimate would be the biggest full-year economic contraction in Philippine history, after the 7% GDP contraction in 1984, based on available official data dating back to 1947.

The World Bank noted the Philippines is among the “worst-hit” economies in the region, which had “extended periods of lockdown combined with large domestic outbreaks.”

“Restrictions on economic activity to stem the pandemic have largely eased across the region, and goods exports have started to recover. Although the spread of the pandemic appears to have slowed in much of the region, infection rates remain elevated in Indonesia and the Philippines and have been increasing recently in Malaysia,” the report read.

The Health department reported 1,047 new COVID-19 infections bringing the overall tally to 480,737 as of Wednesday. This is the second highest in Southeast Asia, after Indonesia which had 788,402 COVID-19 infections as of Wednesday.

The World Bank also kept its Philippine growth forecast at 5.9% this year and 6% in 2022. This is below the Philippine government’s 6.5-7.5% growth target this year and 8-10% in 2022.

Meanwhile, the World Bank said the emerging East Asia and the Pacific region likely inched up by an average of 0.9% last year, before growing by 7.4% and 5.2% this year and next year.

Economic recovery this year is likely to be led by China which is seen growing by 7.9%, while the rest of the region could see a more prolonged recovery. — B.M.Laforga

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