Security Bank: Philippines unlikely to meet economic growth target for 2020

The Philippines is unlikely to meet its economic growth anew this year, given downside risks such as coronavirus disease (COVID-19) likely to drag development.

According to the latest estimates of Security Bank Corp., the Philippine economy is forecasted to grow by 6.1% to 6.3% in 2020.

This is lower than the current government target of 6.5%-7.5%, already lower than the previous goal of 7.0% to 8.0%.

Should this be realized, it would be the third consecutive year that the Philippines failed to meet its economic growth target.

According to Security Bank, economic growth in the first quarter is likely to be dampened by the COVID-19, which caused weakness in several sectors.

"Economy is expected to get hit 1Q. We estimate 5.9% to 6% in quarter with government spending back up, to be offset by sectoral weakness," Security Bank's research note read.

Among the major sectors seen to be affected the most are retail, travel and tourism, and trade.

Just last week, the tourism industry stakeholders met with President Rodrigo Duterte and agreed to lower airfare and hotel rates to boost local tourism amid the outbreak.
"Remittance growth steady but could be slightly affected if COVID-19 worsens," added Security Bank.

Remittances posted a record high of $33.467 billion in 2019, up by 3.9% from the $32.213 billion recorded in 2018.

Another downside risk, according to Security Bank, is the reported crackdown of the Chinese government on suspected workers of the Philippine Offshore Gaming Operations (POGO) industry.

China over the weekend said it has obtained a list of Chinese nationals working for online gaming operations, in an ongoing effort to curb gambling and entities defrauding the country.

The sector seen to be affected the most by this is real estate, which counts POGO workers as one of the top demand drivers.

"Nearly 15,000 new condo units available but could face weaker demand from POGO workers," said Security Bank. —NB, GMA News