The Philippine economy is projected to contract the sharpest in Southeast Asia, as the coronavirus pandemic wipes out jobs and businesses, according to the International Monetary Fund (IMF).
In its World Economic Outlook released on Tuesday, October 13, the IMF projected that the Philippines' gross domestic product (GDP) will contract by 8.3% in 2020, as lower remittance flows weigh down domestic spending. This is deeper than the initial 3.6% slump estimated last June. (READ: Virus pushes Philippines into recession with worst GDP plunge on record)
The Philippines currently has the most COVID-19 cases among members of the Association of Southeast Asian Nations (ASEAN), with a total of 344,713 as of Tuesday.
Yongzheng Yang, IMF resident representative to the Philippines, said the multilateral lender has seen "some signs of recovery" as the government eased lockdowns.
The recovery for 2021, however, is primarily because the economy will be coming from a sharp drop in 2020, or what is called the base effect.
"Real GDP is projected to expand by 7.4% in 2021, helped by – in addition to the base effect – an expected rebound in pent-up demand from the relaxation of quarantine measures and continued effects of the policy easing in 2020," Yang said.
He added that it would "take a couple of years" before the Philippines' GDP would return to pre-pandemic levels.
Yang recommended that the government enforce "bold fiscal action to minimize the scarring effects" of the pandemic.
Indonesia, which ranks 2nd in the number of infections in Southeast Asia, is projected to contract by just 1.5%.
Thailand and Malaysia's GDP figures are projected to shrink by 7.1% and 6%, respectively.
Only Vietnam is seen to emerge with positive growth at 1.6%.
On average, the 5 ASEAN countries will collectively contract by 3.4%, while emerging and developing Asia is projected to decline by 1.7%.