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BSP sees slow economic rebound after ECQ is lifted

The Philippine economy will experience a slow recovery after quarantine measures to contain COVID-19 spread are lifted, the Bangko Sentral ng Pilipinas (BSP) said Friday.

“Overall our view on the path or outlook for domestic economic activity or GDP will be a U-shaped recovery,” BSP Director for Economic Research Dennis Lapid said in a virtual press briefing.

“Meaning it will be a slow rebound after containment measures or quarantine measures are lifted,” Lapid said.

President Rodrigo Duterte placed the entire Luzon island under enhanced community quarantine from March 17 to April 14, and further extended until April 30.

Duterte later on extended the ECQ in Metro Manila, Central Luzon and CALABARZON until May 15. He also placed some areas in the Visayas and Mindanao under ECQ.

Slower economic recovery stems from an expected slowdown in the overall global economic activity due to the COVID-19 pandemic, according to Lapid.

“Weaker global activity could lead to sharper decline to tourism receipts, trade, and remittances and that could be a downward influence on GDP (gross domestic product) growth,” he said.

BSP Governor Benjamin Diokno earlier noted that the worst case scenario is a zero to -1% economic growth resulting from the global pandemic.

Nevertheless, Lapid said monetary authorities have taken aggressive policy responses to safeguard the economy.

This includes a total of 125 basis points reduction in key policy rates which are seen to improve financial conditions and support economic growth as well as ramp up consumer and business confidence, according to the central bank official. --KBK, GMA News