PH economy to grow 6.2% in 2021, says UN

The United Nations (UN) projects the Philippine economy to bounce back this year, albeit below the government’s official target range, as downside risks remain high.

In its “World Economic Situation Report and Prospects 2021,” the New York-based global body said the country’s gross domestic product could rebound by 6.2 percent from last year’s 9.5-percent contraction.

If proven true, the figure would miss hitting the government’s official forecast range of 6.5 to 7.5 percent.

“In the Philippines, a recovery in remittance inflows over the outlook period would help to boost domestic demand,” the UN said.

This view is consistent with the Bangko Sentral ng Pilipinas’ forecast of a 4-percent growth in overseas Filipino worker (OFW) remittances this year.

Latest data showed that money sent home by Filipinos abroad in January to November reached $29.98 billion, a 0.9-percent dip from $30.25 billion in the same period in 2019.
But the UN warned that still-deteriorating global economic conditions would continue to hurt countries that relied heavily on remittances.

“As migrant workers in host countries face employment losses and wage cuts, households in recipient countries could see a large decline in this major source of their income, which would constrain private consumption,” it said.

The Philippines’ economic recovery, and that of other developing countries in East Asia, would hinge on the type and effectiveness of pandemic-containment measures, it added.

It cited in particular widespread physical-distancing restrictions in most Southeast Asian countries, which resulted in sharp contractions in economic activity, particularly private consumption.

“However, while Singapore, Thailand and Vietnam flattened the curve relatively quickly and with shorter lockdowns, Indonesia, Myanmar and the Philippines are still struggling with high daily levels of new infections,” the UN said.

“In the latter group, a more prolonged period of limited mobility and weak sentiments will depress consumer spending and private investment, thus constraining the pace of recovery,” it added.

Source: ManilaTimes