MANILA, Philippines — Malacañang Thursday vowed to disprove the forecast of Moody's Analytics that the Philippines would be the last country in Asia-Pacific to fully recover from the recession caused by the pandemic even as it stressed the need to keep the country's debts manageable.
In a report, think tank Moody’s Analytics said the Philippines' full economic recovery may only come in the fourth quarter of next year. The Philippines and India are expected to "struggle" because of their deep recessions and the "uncertain" fiscal support of their policymakers, the report added.
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"Do not worry. We will disprove that forecast wrong. That is the reason why we are reopening the economy. We keep on reminding our country to take care of themselves so they can work," presidential spokesman Harry Roque said at a press briefing Thursday.
Roque said the Philippines is "prudent" about borrowing money because a huge deficit could affect its credit rating, which in turn would hike the interest rates of its loans.
"If we need to borrow money, we would borrow money for our expenditures... For now, I think the move of (Finance) Secretary (Carlos) Dominguez (III) to be cautious in borrowing and spending is more prudent," the Palace spokesman said in Filipino.
"Let's not spend our money immediately. We do not know how long this pandemic will last," he added.
Roque expressed confidence that the Philippines' economic prospects would be better this year.
"I think we have seen the worst and I think the entire government machinery agrees with this. We already know how our enemy COVID-19 looks like and this year won't end without the vaccination of 50 to 70 million of our countrymen. We expect to achieve the 70% so we can have herd immunity," he said.
"So do not worry, the worst is over. As they said, we’ve hit rock bottom and the only way to go is up," he added.
The Philippine economy contracted by 11.5% in the third quarter as lockdown measures in Metro Manila, nearby provinces, and Cebu City disrupted the operations of several businesses. It was the first time in 35 years that the Philippine economy shrank in three consecutive quarters. The country's gross domestic product contracted by 0.7% in the first quarter and by 16.9 in the second quarter.
The government expects the economy to have contracted by 8.5 to 9.5% last year because of the prolonged imposition of community quarantines in various regions. It sees the economy going back to growth territory this year, with the GDP expected to expand by 6.5 to 7.5% in 2021 and by 8 to 10% in 2022 because of eased quarantine restrictions and improved healthcare system capacity.