Philippines: Record economic contraction in 2020 – UOB

Senior Economist at UOB Group Julia Goh and Economist Loke Siew Ting review the latest GDP figures in the Philippines.

Key Quotes

“The Philippine economy continued to post a contraction, albeit narrower decline of -8.3% y/y in 4Q20 (3Q20: revised upward slightly to -11.4% from -11.5%), after prolonged movement restrictions, a series of typhoons in Oct-Nov, and lower income weighed on household spending, investment, tourism-related industries, and agriculture & fisheries output. The 4Q20 GDP reading came in line with our estimate (-8.2%) but below Bloomberg consensus (-7.9%), sending the nation’s economy into a -9.5% tailspin for the entire year of 2020 (2019: +6.0%).”

“The pace of growth recovery may continue to be constrained by a prolonged period of movement restrictions and practising of social distancing given the rise of new coronavirus variant and uncertainty surrounding the inoculation… We maintain our 2021 full-year GDP growth target at 7.0%, partly aided by favourable base effects, further improvement in export sector, and continued policy support.”