Philippines economy to grow by 6.3% in Q1 — IMF

MANILA, Philippines — The International Monetary Fund (IMF) expects a 6.3 percent growth for the Philippine economy in the first quarter despite a spate of natural disasters led by the eruption of Taal Volcano as well as the global outbreak of the 2019 novel coronavirus (nCoV).

Yongzheng Yang, IMF resident representative to the Philippines, said in a press conference the Philippine economy may grow by 6.3 percent in the first quarter.

“Our annual growth rate forecast is 6.3 percent. So we expect the quarter growth to be around that range. I don’t have the specific numbers with me right now,” Yang said.

The projection, he added, already takes into account the impact expected from the virus outbreak as well as the Taal Volcano eruption.

 “I think the eruption of the volcano if I understand correctly had some negative impact on production including agriculture and tourism. But overall, the impact seems to be relatively small,” he said.

Yang said the IMF expects the Philippine’s gross domestic product to expand by 6.3 percent this year, 6.4 percent in 2021, and 6.5 percent in 2022.

However, Yang explained the latest projections do not include the impact of the global virus outbreak.

 “The coronavirus, as you know, has caused a lot of anxieties and restrictions on travel. The Philippine economy is not immune to that. I think the major sector that comes to my mind would be tourism,” he said.

He cited the statement made by BSP Governor Benjamin Diokno that the virus outbreak could slash the Philippine GDP growth by 0.3 percentage points this year.

Yang said IMF sees inflation accelerating to 2.6 percent this year and to 3.1 percent in 2020 before easing to three percent in 2022.

 “If downside risks are realized, the BSP has room for further easing monetary policy to achieve its inflation objective,” Yang said.