An economic contraction of more than 20% in the second quarter would be problematic for the Philippines but the country is likely to have a "very nice Christmas," Bangko Sentral ng Pilipinas Governor Benjamin Diokno said Thursday.
In a virtual briefing, Diokno said that the Philippines likely recorded its worst economic performance during the second quarter, but recovery is seen in succeeding quarters.
"What I can see is if the contraction is single digit, that's really nice, very nice. If it's between 10 to 15 (percent) that's still tolerable, but anything that is higher than 20 (percent), that could be problematic," he said.
The Philippine Statistics Authority (PSA) is scheduled to release second-quarter growth figures next Thursday, August 6.
The economy contracted by 0.2%, the worst contraction in over two decades since the gross domestic product (GDP) fell by 0.5% during the Asian Financial Crisis in 1998.
"I foresee a hockey-stick-like recovery for domestic economic activity. I've said that we've seen the worst and that's the second quarter," said Diokno.
The Philippine economy was placed in a standstill in March to May, when Metro Manila and other "high-risk" areas were placed under an enhanced community quarantine (ECQ) from March 17 to May 15, followed by a modified enhanced community quarantine (MECQ) until May 31.
More relaxed restrictions have since been in place under the general community quarantine (GCQ) which was implemented starting June 1, and extended to last until July 31.
"As I said, the third quarter will be better than the second quarter and the fourth quarter will be much much better than the third quarter so we will probably have a very nice Christmas," said Diokno.
By JON VIKTOR D. CABUENAS, GMA News
Source: Peso Economics
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