MANILA - An analyst at the Asian Development Bank (ADB) said on Wednesday it was possible for the Philippines to stage a strong economic recovery next year after getting battered this year by the COVID-19 crisis.
ADB senior economist James Villafuerte said they are “still factoring a V-shaped recovery” for most Asian economies, including the Philippines.
“That's because we expect a very bad economic outcome this year which means that there’s much opportunity for growth next year,” Villafuerte said in an interview with ANC.
On Tuesday, Finance Secretary Carlos Dominguez told senators that the government was expecting a “strong bounce-back” in 2021, with growth possibly hitting 8.1 percent as stimulus measures kick in.
“I agree, there’s room for a strong bounce-back for the Philippines next year,” Villafuerte said, noting that the Philippines unveiled a very large stimulus package equivalent to 2.7 percent of gross domestic product.
Villafuerte, however, said for this year, tourist arrivals, retail sales, and even traffic around commercial centers “imply a very sharp drop” in economic activity.
In April, the ADB said that Philippine growth would slow to 2 percent this year because of the COVID-19 crisis. But this estimate was before the full impact of the lockdown of the entire island of Luzon was felt.
The economy shrank by 0.2 percent in the first quarter, the first negative growth since 1998, following the implementation of measures meant to check the spread of the novel coronavirus, and the eruption of the Taal Volcano in January.
Villafuerte also expects the growth of remittances from overseas Filipinos to slow down because of the pandemic. The ADB economist, however, does not see remittances falling as he noted that overseas Filipinos tend to send more money home during times of crisis.