(Bloomberg) -- The Philippine economy contracted in the first quarter as stringent lockdown measures to contain the coronavirus outbreak shut most businesses and sapped consumption.
Gross domestic product fell 0.2% in the first quarter compared to a year ago, using 2018 as the new base year, the Philippine Statistics Authority said Thursday. It was worse than the median estimate of 2.9% in a Bloomberg survey of economists. It was the first contraction since the fourth quarter of 1998, the agency said.
Key Insights
- The economic slump could be deeper than expected after a lockdown in the Philippine capital region and nearby areas was extended until May 15, Finance Secretary Carlos Dominguez said Wednesday. Economic managers initially projected GDP could contract by as much as 0.8% this year, assuming the outbreak lasts until June
- President Rodrigo Duterte plans to gradually reopen the economy from May 15, possibly allowing construction, manufacturing and other essential services to restart
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- The Philippines is drafting an economic recovery plan to support hard-hit industries, raising funding through a $2.35-billion dollar bond sale and as much as $7 billion in concessional loans from multilateral lenders
- The central bank has cut the benchmark rate by 1.25 percentage points and banks’ reserve requirement ratio by 2 percentage points this year to help boost the economy
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