PH recovery to be hockey stick-like
BANGKO Sentral ng Pilipinas (BSP) Governor Benjamin Diokno still believes the country’s economic recovery from the coronavirus pandemic would be shaped like a hockey stick despite the reimposition of a stricter lockdown on Metro Manila and nearby provinces.
In a text message to
on Monday night, Diokno said the switch from general community quarantine ( GCQ) to modified enhanced community quarantine (MECQ) in the National Capital Region and the provinces of Laguna, Cavite, Rizal and Bulacan from August 4 to 18 “won’t make a material difference.”
“The economy is expected to hit rock bottom in [the] second quarter, third quarter will be better than [the] second quarter and [the] fourth quarter will be much better than [ the] third quarter. It (recovery) will still be hockey stick-like,” he explained.
Recovery is described as hockey stick- shaped if there is a sharp and sudden increase in domestic output after a long period of linear growth.
The government put Metro Manila and the four provinces under the 15- day MECQ on Tuesday after the medical community on Saturday appealed for a timeout the tigher lock
down would offer to rethink and recalibrate their coronavirus response strategies.
Their call came amid the continued surge in coronavirus infections in the country. As of Tuesday, the number of confirmed cases rose to 112,593, of which 44,429 are active. Of the total, 66,049 have recovered and 2,115 died.
Despite his optimism, Diokno
said the pandemic remained a public health issue with monumental economic implications.
According to him, the term “public” means that each individual has a role to play in mitigating the impact of the crisis on the loss of lives, jobs and incomes.
“The behavior of individuals is an important part of the solution to this unprecedented crisis,” he said.
Also on Tuesday, Rizal Commercial Banking Corp. chief economist Michael Ricafort said the MECQ would fundamentally reduce economic activities, warning that the hardesthit sectors could lose about 4 percent of their yearly income as a result.
“[ T] his could reduce full- year 2020 Philippine GDP ( gross domestic product) estimate by about 1 percentage point to - 5 percent to - 7 percent,” he added.
“This may also slow recovery prospects for the economy and some investment valuations, as well, especially for some adversely affected listed companies/ other investments.”
Ricafort’s projection is worse than his previous estimate of a 4- to 6- percent contraction. If correct, it would surpass the government’s revised assumption of a 2- to 3.4- percent contraction for 2020.
It is also worse than Fitch Ratings’ - 1 percent, the World Bank’s - 1.9 percent, Fitch Solutions’ - 2 percent, Sun Life Philippines’ -2 to - 2.5 percent, NZ Research’s - 2.5 percent; ING Bank Manila’s - 2.9 percent, S& P Global Ratings’ - 3 percent, International Monetary Fund’s - 3.6 percent, the Asian Development Bank’s - 3.8 percent, HSBC Private Bank’s - 3.9 percent and Moody’s Investors Service’s - 4.5 percent; but better than Capital Economics’ - 8 percent.