MANILA – The path to economic recovery rests on the passage of fiscal stimulus measures among others, an analyst said on Wednesday as it sees the Philippine economy shrinking by at least 2 percent this year.
“Fiscal stimulus measures are still pending whereas most other neighboring countries have started to roll out. I believe the measures are still likely to be announced over the next couple of weeks. Based on the plans, we will adjust our forecast accordingly. We do remain cautious about this. It’s something we think will be the main cushion for growth this year,” Anwita Basu, Head of Asia Country Risk Research at Fitch Solutions told ANC’s Market Edge.
Philippine urban hubs are on extended lockdowns. President Duterte announced on Tuesday Metro Manila will remain under general community quarantine while Cebu City will stay under enhanced community quarantine until July 15.
“If we see prolonged third quarter lockdowns in emerging economies, then that would trigger further revision downwards to our growth forecast. We still remain hopeful the second half will see a recovery in economic activity," she said.
Unconventional tools by the Bangko Sentral ng Pilipinas (BSP) to prop up the economy also helped.
Some pending stimulus bills include the P1.5 trillion COVID-19 Unemployment Reduction Economic Stimulus (CURES), and Corporate Recovery and Tax Incentives for Enterprises Act (CREATE), formerly known as CITIRA, which seeks to cut the corporate income tax rate to 25 percent from 30 percent as early as July.