PHL economy’s best-case scenario is zero growth – Dominguez

  • Philippines Finance Secretary Carlos Dominguez said the best-case scenario for the economy in 2020 is zero growth, while the government’s massive spending to fight the pandemic will bloat the budget deficit.
  • Gross domestic product could shrink by as much as 1% — its first contraction in more than two decades — while the budget deficit may widen to 5.3% of GDP, from a target of 3.2% in 2019, Mr. Dominguez said in a televised briefing alongside President Rodrigo Duterte and other officials.
  • Department of Finance (DOF) estimates had shown forgone revenues to reach PHP286.4bn if GDP posted 0% growth in 2020, or a bigger PHP318.9bn if GDP contracted by 1%.
  • For the economy to immediately rebound postpandemic, Dominguez said the economic team was crafting a “bounce-back” plan while currently assessing the economic damage caused by COVID-19.
  • The Philippines has lined up some PHP1.17tr to fight the coronavirus outbreak, including PHP830bn from central bank actions, said Mr. Dominguez.
  • To fund the deficit, the government will borrow USD5.6bn from agencies including the Asian Development Bank and World Bank, then tap the overseas bond market, he said.
  • “We are confident we have the financial capability to bridge this problem,” the finance secretary said.
  • “The program is to spend, first, to help the poorest families, and then to help the small and medium enterprises, and then to provide support for the companies that are supported by their banks.”
  • The president has pledged to sell government assets to raise funds if needed. The government may have to raise taxes in 2021 or 2022, Mr. Dominguez told CNBC.

External Link : https://www.bworldonline.com/phl-economys-best-case-scenario-is-zero-growth-dominguez/

External Link : https://business.inquirer.net/294484/flat-growth-or-0-8-gdp-contraction-seen-in-2020

9-Apr-2020


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