Debt watcher Fitch Ratings has expressed optimism that the Philippine economy will regain its pre-pandemic level by the second half of 2022.
MANILA — The rating firm said it is keeping a close eye on the coronavirus disease 2019 (COVID-19) pandemic’s long-term impact on the Philippine economy which suffered a record 9.6 percent contraction in 2020, as the Duterte administration implemented strict lockdowns to curb the outbreak of the dreaded virus.
“We will continue to assess the macroeconomic policy responses and the authorities’ ability to adhere to the fiscal consolidation plans in their medium-term framework. We will assess potential scarring effects, as well as possible challenges to unwinding the exceptional policy response to the health crisis and restoring sound public finances as the pandemic recedes,” Sagarika Chandra, a director at the Fitch Ratings’ Asia-Pacific Sovereigns team, said.
Chandra added that the downside risks to the Philippine medium-term growth prospects stem from “the uncertain evolution of the virus which would dampen business sentiment and the recovery momentum.”
In July, Fitch Ratings revised its outlook on the Philippines to “negative” from “stable.”
Moody’s Investors Service in July also said the country may face “deep scarring” alongside Peru and India where pandemic management became a challenge.
The National Economic and Development Authority (NEDA) has estimated the total economic cost of the COVID-19 pandemic and lockdowns may reach ₱41 trillion over the next four decades.
Economists have warned about the scars inflicted by the pandemic on the Philippine economy’s medium- and long-term potential. (JD/Headline PH)