Philippine growth to slow with lockdown extension: Fitch Solutions

ABS-CBN News

Posted at Apr 07 2020 12:26 PM | Updated as of Apr 07 2020 12:46 PM

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MANILA - Fitch Solutions said Tuesday it would lower its 4 percent growth forecast for the Philippines due to the extension of the Luzon lockdown to April 30.

Four percent growth assumes an "optimistic scenario," Fitch Solutions head of Asia Country Risk Anwita Basu told ANC. The enhanced community quarantine, which covers half the Philippines' 100 million people, was originally scheduled to end on April 12.

"With the extension of the Luzon lockdown we would be bringing that down slightly," Basu said. 

Socioeconomic Planning Secretary Ernesto Pernia earlier said the economy could contract by 0.6 percent or grow up to 4.3 percent this year depending on how long the COVID-19 pandemic would last.

The entire island of Luzon was placed under enhanced community quarantine since March 17 to stop the spread of COVID-19. Businesses, schools and public transport were suspended.

With measures to address the COVID-19 in place, the Philippines could "recover faster" compared to its ASEAN neighbors, Basu said.

Bangko Sentral ng Pilipinas Gov Benjamin Diokno cut the benchmark interest rate and reserve requirement ratio for banks to add liquidity to the market. The central bank has room for further adjustments and is preparing its "full arsenal" if needed, he said.

The Philippines also enacted its COVID-19 response law to ensure cash aid for 18 million poor families. It also imposed grace periods for loan and rent payments.