Finance Secretary Carlos Dominguez said a zero growth in gross domestic product due to the onslaught of the coronavirus disease (COVID-19) this year will result in approximately P286.4 billion in foregone revenues for the government.
In a Bloomberg interview Wednesday, Dominguez said these numbers were based on assumptions of the inter-agency Development Budget Coordinating Council.
“I'm looking it up right now because there have been constant meetings with the DBCC. And right now, they estimate, [that] if we have 0 percent growth, the drop in revenue will be P286 billion,” Dominguez said.
Assuming a -1 percent growth, the drop in revenue will be P318 billion, he said.
“Those are roughly the numbers, but at this point in time, we don't even have a very good estimate of what the GDP is going to look like. According to NEDA, it can be -0.66 percent to +4.3 percent. For sure, almost sure, the revenues from fuel will be down by about P14 billion because of combination of drop in demand and drop in prices,” Dominguez said.
Before the onset of the disease, the government earlier projected a 6.5 to 7.5 percent growth for 2020.
NEDA, however, said it was looking at a slower expansion of 5.5 to 6.5 percent two weeks ago because the tourism industry, one of the pillars of strength of the domestic economy, was badly hit by the pandemic.
Early this week, debt watcher S&P Global Ratings said it was expecting the Philippine economy to slow further to as low as 4.2 percent this year from the actual expansion of 5.9 percent in 2019, taking into consideration the assumptions of economists that COVID-19 will peak in August.
Despite the downward GDP revision, the estimate for the Philippines is still stronger than the 2.9 percent for China, 4.1 percent for Indonesia, 2.7 percent for Malaysia, 1 percent for New Zealand, 1.6 percent for Taiwan, and 0.5 percent for Thailand.
The Asia-Pacific countries seen to post negative growth are Hong Kong, -1.7 percent; Japan, -1.2 percent; Singapore, -0.8 percent; and South Korea, -0.6 percent.
Dominguez said despite the expected impact of COVID-19 to the economy, the government’s aim for an “A” credit rating remained.
Dominguez said the government is currently in negotiations with multilateral agencies for up to $2 billion in funding support to the people affected by the pandemic.
He said these multilateral agencies include the World Bank, Asian Development Bank, and possibly the Beijing-based Asian Infrastructure Investment Bank.