Sun Life sees U-shaped economic recovery for PH

THE gradual resumption of economic activities here and overseas could support a U-shaped gross domestic product (GDP) recovery for the Philippines, according a Sun Life Philippines analyst.

In a virtual market outlook briefing on Thursday, Sun Life Philippines Chief Investments Officer Michael Enriquez said the country’s economy could shrink by 2 to 2.5 percent this year.

His latest estimate compares with his previous forecast of 2.8 percent to -6 percent. The outlook also compares with the government’s revised GDP contraction of -2.0 to -3.4 percent this year.

In the first quarter, the economy shrank by 0.2 percent.

Despite this projection, Enriquez said “we believe that the Philippines can recover and have a U-shaped recovery over the next few months or quarters.”

Explaining his outlook, the Sun Life analyst noted that there are now a few economic activities occurring in some of the countries that have started to open their economies recently, like China, South Korea and Japan. This, he said, could have a positive impact on the

Philippines’ external trade.

“We could probably become a bit more positive that we can have a slight growth in exports,” he added.

Domestically, Enriquez also said the National Capital Region’s anticipated transition from being under enhanced community quarantine to the more relaxed general community quarantine was giving optimism for consumption growth.

“As the economy starts to reopen, we can see more activity down the road, and on household consumption as well. We are less negative and a bit more optimistic in our view from probably a month-and-a-half ago,” he said.

Enriquez’s forecast compares with the World Bank’s 3 percent, the Asian Development Bank’s 2 percent, ANZ Research’s 1.2 percent, International Monetary Fund’s 0.6 percent, S&P Global Ratings’ -0.2 percent, Fitch Ratings’ -1 percent, Fitch Solutions’ -2 percent, Moody’s Investors Service’s -2 percent Rizal Commercial Banking Corp.’s -2 to -4 percent, ING Bank Manila’s -2.9 percent, Nomura’s -4.8 to -2.4 percent and Capital Economics’ -6 percent.