MANILA -- Bangko Sentral ng Pilipinas Governor Benjamin Diokno said Monday the economy was poised to slide into a recession in 2020, contracting by 0.2 percent for the full year due to an extended lockdown to stop the COVID-19 pandemic.

First quarter growth will be lower than expected, followed by 2 successive quarters of negative growth, before bouncing back in the fourth quarter, Diokno told ANC.

An economy is in recession when gross domestic product contracts or posts negative growth for 2 successive quarters. Official January to March GDP data will be released on May 7.

Growth in 2021 could go as fast as 7.7 percent, Diokno told ANC.

Further cuts in the benchmark interest rate, currently at 2.75 percent are "still in the agenda," he said. "We'll do anything to get us through this crisis."

"We are moving towards normalization, from ECQ to GCQ," Diokno said, referring to the Enhanced Community Quarantine and the one-notch lower General Community Quarantine.

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Banks are "well capitalized" to weather a possible rise in bad loans, Diokno said. "In a worst case scenario, they can absorb some of the losses."

Diokno said banks committed some P600 billion in credit to small and medium businesses in coordination with the Department of Finance "and that amount could easily be doubled."

Diokno said dollar remittances from Filipinos overseas would still increase this year as expatriate workers tend to send more money home in times of crisis.

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