The International Monetary Fund (IMF) projects the Philippine economy to contract the sharpest in Southeast Asia, as the COVID-19 pandemic wipes out jobs and businesses.
In its World Economic Outlook, the IMF projected that the Philippines’ gross domestic product (GDP) will contract by 8.3% in 2020, as lower remittance flows weigh down domestic spending. This is deeper than the initial 3.6% slump estimated last June.
Yongzheng Yang, IMF resident representative to the Philippines, said the multilateral lender has seen “some signs of recovery” as the government eased lockdowns.
The recovery for 2021, however, is primarily because the economy will be coming from a sharp drop in 2020, or what is called the base effect. He added that it would “take a couple of years” before the Philippines’ GDP would return to pre-pandemic levels.