Global rating agency Fitch Ratings is expecting the Philippines to suffer a deeper economic contraction of eight percent this year, noting a continued erosion of the country’s fiscal buffers amid the COVID-19 pandemic. Fitch’s projection is deeper than the Development Budget Coordination Committee’s assumption of a 5.5 per cent drop.
In a report, Fitch Ratings said the country’s economy may decline by much more than the previous estimate of four percent following the implementation of “renewed lockdown measures in and around Metro Manila.”
Last May, the ratings agency affirmed the Philippines’ BBB rating, which reflected the country’s healthy fiscal and external buffers. However, Fitch noted that “these buffers are being eroded by the pandemic-related economic shock, although there is room to accommodate some deterioration in the fiscal outlook.”