Philippines to see 'worst' GDP contraction in Q2 due to virus: analyst

ABS-CBN News

Posted at May 15 2020 11:52 AM | Updated as of May 15 2020 11:58 AM

A barricade is set up to block the entrance to Banawe Street in Quezon City on May 11, 2020. Jonathan Cellona, ABS-CBN News

MANILA -- Economic growth in the second quarter will likely be worse than the January to March period as the full toll of the coronvirus lockdown is reflected, an economist said Friday. 

The economy could contract by 13 percent in the second quarter due to lack of activity after almost 2 months of movement restrictions, Standard Chartered Asia economist Chidu Narayanan told ANC. 

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The Philippine economy shrank by 0.2 percent in the first quarter, the first contraction since 1998 due to the COVID-19 pandemic and resulting lockdown.

"Unfortunately we think that Q2 would be the worse quarter not just for the Philippines but for several countries across the world as that was when the majority of the lockdown measures were implemented," Narayanan said.

Narayanan said a second wave of infections would have a "much more severe impact" on the economy.

The Philippine economy will likely contract by 2 to 3.4 percent this year, based on revised government assumptions. It will likely cause up to P2 trillion in economic losses, equivalent to 9.4 percent of gross domestic product, the Department of Budget and Management said.