Bangko Sentral ng Pilipinas (BSP) Governor Benjamin Diokno said the worst is over for the Philippines and now, though fragile, is on its way to economic recovery.
“The worst is over. But while we’re not out of the woods yet, we have to look beyond this crisis,” BSP Governor Benjamin Diokno said in a virtual forum.
Diokno said the second quarter could have been the worst for the country’s economy when it comes to gross domestic product (GDP) contraction.
“So we are now on the way to recovery at this point. The second quarter, for me, was the worst quarter, but we are now moving toward a recovery,” Diokno said.
The country had a 0.2 percent GDP contraction when Luzon was placed under community quarantine in mid-March.
The BSP chief said earlier that the GDP likely contracted by 5.7 to 6.7 percent in the second quarter due to the full impact of the stricter community quarantine. This would technically place the country’s economy in recession after two consecutive quarters of GDP contraction.
Economic managers expect the GDP to contract by 2 to 3.4 percent this 2020 from a 6 percent growth in 2019 through the Development Budget Coordination Committee (DBCC). This would end more than 20 years of positive growth as the GDP last contracted by 0.5 percent in 1998 amid the height of the Asian financial crisis.
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DBCC expects a robust economic rebound for 2021, with a GDP growth of eight to nine percent.
“I foresee a hockey stick like recovery with the lowest point in the second quarter. But the third quarter will be better and the fourth quarter will be even better. We expect a strong rebound in 2021,” Diokno said.
The BSP governor also said Filipinos should learn how to live with the virus as the targeted lockdown would be imposed instead of nationwide.
“Let me remind you again that we entered this crisis from a position of strength,” the BSP chief said.
“Yet, the Philippines has had strong economic fundamentals such as robust growth, good fiscal performance, and strong external and financial sector positions—which provided relative stability in the face of the COVID-19 pandemic,” Diokno said.