Philippine economic managers now project the local economy to contract further this year with losses amounting to as much as P2.0 trillion, the Development Budget Coordination Committee (DBCC) announced Wednesday.
In a statement, the inter-agency DBCC said it now projects the gross domestic product (GDP) to shrink further to 2.0% to 3.4% this year, after the economy contracted by 0.2% in the first quarter, the first time since 1998.
The government earlier blamed the slowdown to unforeseen circumstances in the first three months to unforeseen circumstances -- the Taal Volcano eruption, slower trade from China, and the coronavirus disease 2019 (COVID-19) pandemic.
Economic managers earlier targeted economic growth at 6.5% to 7.5%, which was already revised downward from 7.0% to 8.0% earlier.
"Timely implementation of a well-targeted recovery program, alongside efforts of the private sector, will mitigate the impact of the COVID-19 pandemic," the DBCC said.
"Such a program will help the country regain confidence, attain higher economic growth, and restore employment rates to pre-crisis levels," it added.
For 2021, the DBCC said it expects the country to recover with a GDP growth of 7.1% to 8.1%.
The DBCC also announced lower projections -- exports to contract by 4.0%, and imports by 5.5% in 2020. For the next two years, exports are seen to recover to 5% and imports to 8%.
"This is in anticipation of the global economy’s sharp contraction as a result of the COVID-19 pandemic," the inter-agency body explained.
Economic managers also lowered the expected revenue collection this year to P2.61 trillion, equivalent to 13.6% of the gross domestic product. This is 17.7% or P560.5 billion lower than the P3.17 trillion approved in March.
On the other hand, spending is projected at P4.18 trillion or 21.7% of the gross domestic product, marking an increase of P12 billion from the program approved in March.
This led the DBCC to project the deficit to P1.56 trillion this year, 2.8 percentage points higher than the March projection, but the body maintained that the debt level remains "manageable."—AOL, GMA News