MANILA - An economist said Monday the Philippine economy is likely to contract 8 to 9 percent this year because of the impact of the pandemic, the measures implemented to contain the virus, as well as the insufficient government stimulus for the economy.
This was worse than the 5.5 percent whole year contraction forecast by economic managers in August.
The International Monetary Fund, meanwhile forecast an 8.3 percent whole year contraction in a report released last month.
On the eve of the release of official gross domestic product figures, economist Calixto Chikiamco said the government should have increased spending, even more, to prop up the economy.
“We had the strictest and longest lockdown periods in the world, also stingiest in economic stimulus,” Chikimaco said in an interview with ANC.
Chikiamco blamed the strict lockdowns for cratering consumption, which he said accounts for around 70 percent of the economy, which in turn caused the economy to fall into recession.
He also said the government’s efforts to stimulate the economy were not enough.
“I think that we should have a bigger economic stimulus package than what we have now because Bayanihan 1 and 2 are only about 3 percent of GDP or less, whereas other countries have a bigger share of economic stimulus,” he said.
Besides allocating more money for stimulus spending, Chikiamco noted that the government has also been slow at disbursing the allotted money.
Chikiamco said these were some of the reasons why the Philippines is projected to suffer the worst “economic scars” from the COVID-19 pandemic in Asia, besides India, according to a recently released report by the International Monetary Fund.
The Bangko Sentral ng Pilipinas has said that it expects third quarter GDP to be better than the "rock bottom" second quarter figures after the reopened economy showed "positive indicators."