CEBU, Philippines — While economic slowdown in general is expected once the COVID-19 pandemic clears out, some sectors in the Philippine economy are seen to rebound faster after the health crisis.
Colliers International Philippines forecasted that the rebound shall be led by consumer goods sector while the luxury sector is expected to rebound the last.
Meanwhile, it is expected that the BPO expansion will slow down initially, but a strong rebound is expected after like what happened several months after the Global Financial Crisis (GFC) in 2008-09.
While the wave of BPO expansions happened after six to nine months after the 2008-09 crisis, the recovery from COVID-19 may be longer as the impact could be worse.
So far, office market survey demand, in the form of transactions, declined by 24 percent year-on-year. On the supply side, the projected office stock for 2020 will be adjusted downward by at least 20 percent as developers have halted construction due to their workers being unable to go out and travel to their properties.
Vacancy, on the other hand, stood at about five percent but this is expected to inch up because of the softening of demand. In the past few years, the Philippine office market was driven by Business Process Outsourcing (BPO) locators, Philippine Offshore Gaming Operators (POGO) and traditional occupiers.
Each sector comprises roughly 30 percent of the total office lease transactions annually.
Meanwhile, the growth of the POGOs, may be hampered by issues related to visa applications and the concerns raised by the Chinese government regarding the legality of gambling and money laundering which is detrimental to their economy.
The National Economic and Development Authority said that the impact of COVID-19 to the 2020 GDP is a reduction of growth from 6.5 – 7.5 percent to only 4.3 percent.
The Asian Development Bank (ADB), on the other hand, said that the Philippine economy could just grow by two percent which is weaker than the forecast of three percent by the World Bank.
Meanwhile, the International Monetary Fund (IMF) already declared a global recession last March 28, 2020. In the same report, the IMF projects the recovery to start in 2021. This pandemic has affected everyone and everything in the world. Unlike an economic crisis where people can still go out and be productive, this pandemic has practically paralyzed all of us.
Organizations now heavily rely on stable home internet connections and online communication platforms to still bear a semblance of business as usual by working from home which we covered in the first part of our series.