BSP Governor Benjamin Diokno
MANILA – Economic contraction in the second quarter of the year is expected to be deeper than the first three months performance, but economic managers are keeping their 2 percent to 3.4 percent contraction projection for this year.
“It’s logical that the second quarter will be worse than the first quarter because that’s the peak of the lockdown. But still, we stick with the national government’s position that full year will be a contraction of 2-3.4 percent,” Bangko Sentral ng Pilipinas (BSP) Governor Benjamin Diokno said in a virtual pre-State-of-the-Nation Address (SONA) briefing Wednesday.
In the first quarter this year, gross domestic product (GDP) posted its first negative print of 0.2 percent, the first since the fourth quarter of 1998 due to the impact of the coronavirus disease (Covid-19) pandemic.
Economic managers have revised their growth target for this year from the original 6.5 to 7.5 percent earlier.
However, they remain confident in recovery starting in the third quarter of the year that will lift domestic growth next year to around 8 to 9 percent, which is expected to get a major lift through the government’s infrastructure program.
Economic managers said the budget for infrastructure projects was not touched when the government pooled funds for its Covid-19 response since projects under the Build, Build, Build program are expected to be among the economy’s major growth drivers when it starts to recover.
During the same briefing, acting Socioeconomic Planning Secretary Karl Kendrick Chua said economic managers are guided by two principles on how they set the macroeconomic targets, namely being objective on latest economic data and pro-active on how economic trajectory takes place.
Chua said they continue to work with legislators on the proposed reforms to improve the country’s fiscal situation, as he also urged the public to follow minimum health standards to help address the current health situation in the country and ensure economic recovery in the next months. (PNA)
Photo Credit: Philippine News Agency