BSP Expects Economic Recovery To Start In Q4
The Bangko Sentral ng Pilipinas (BSP)expects the economy to start its recovery by the fourth quarter of 2020. The growth will be seen in key sectors such as construction and agriculture.
In a text message that BSP Governor sent to BusinessWorld, he said:
“I expect to see some growth in Q4 — agriculture, construction, manufacturing, and public administration.”
The economy contracted by 0.2% in the first quarter of the year, weighed down by the Taal eruption, the coronavirus outbreak, and the subsequent lockdown. BSP expects the second quarter to be worse, with the economy seen slipping into a recession. And despite the easing of the lockdown, the GDP contraction is still expected to persist until the 3rd quarter, though slower.
The government sees GDP shrinking by 2-3.4% this year, before bouncing back in 2021 with a growth of 8-9%.
The BSP Governor previously said that the government will need to focus on the labor market to rescue the economy. He suggested a supplemental budget could better support this effort in order for fiscal stimulus to catch up with the monetary measures by the central bank.
Key stimulus bills are still waiting for approval from Congress. One of the pending bills is a COVID-19 Unemployment Reduction Economic Stimulus (CURES) which sets aside PHP1.5 trillion for infrastructure projects that will create jobs. The priority areas for these projects are health, education, agriculture, local roads and infrastructure, and livelihood.
Another pending bill is the Accelerated Recovery and Investment Stimulus for the Economy of the Philippines (ARISE), this allots PHP1.3 trillion for COVID-19 response.