Philippines in for deepest slump in three decades

Virus bane: Men at a construction site in Manila. The Philippine economy shrank 0.2% in the first three months due to the pandemic-induced shutdown. — AFP

MANILA: The Philippine economy could face its deepest contraction in more than three decades, with the government now projecting it to shrink by 2% to 3.4% this year in the wake of the pandemic.

The coronavirus outbreak will cost the economy two trillion pesos (US$40bil) this year, or nearly a tenth of gross domestic product (GDP), the Development Budget Coordination Committee said in a statement yesterday. Massive spending will bloat the budget deficit to as much as 8.1% of GDP so the economy could return to growth of a 7.1% to 8.1% next year, it said.