A fifth of the 30 institutions polled by the Department of Finance (DOF) correctly predicted the contraction of the Philippines’ gross domestic product (GDP) by 9.5 percent in the pandemic-hit year of 2020.
DOF Undersecretary and its Chief Economist Gil Beltran said that of these 30 forecasts released since November last year, 10 were a little more pessimistic, with GDP estimates ranging from -9.6 percent to -10.6 percent.
The remaining 14 were less gloomy in their outlook, Beltran said, with GDP projections of -7.1 percent to -9.1 percent for 2020.
“During these trying times, however, a pessimistic forecaster, no matter how confident he might be in his outlook, would hope that he be proven wrong. For if he were to be eventually proven correct in his gloomy assessment, that would spell more economic suffering. In a sense, such correct reading of the tea leaves would give no pleasure to the forecaster,” Beltran said in his memorandum to Finance Secretary Carlos Dominguez III on the forecasting done on the Philippine economy in 2020.
The institutions in the list collated by the DOF include academic institutions, financial services firms, credit raters, economic consultancy and research firms, banks, and multilateral lenders.
Beltran said those who came out with a less bleak outlook on the country’s GDP had unwittingly turned the table “against the economy and, by implication, the government,” because a “less pessimistic outlook that has been proven wrong implies that government has not done enough as regards risk management and economic revival.”
“Moving forward, there are projections of a rebound in 2021. We should live up to those expectations,” Beltran said.
Beltran said those who made the correct forecast of the economy shrinking by 9.5 percent last year were S&P Global Ratings, DBS Bank, Capital Economics, Global Source Partners, Institute of International Finance (IIF) and Rizal Commercial Banking Corp. (RCBC).
ING Bank NV Manila and the Bank of the Philippine Islands (BPI) predicted the gloomiest outlook for the economy crippled by the COVID-19 pandemic in 2020 with their GDP forecasts of -10.0 percent and -10.6 percent, respectively.
The least pessimistic projections were made by the Colegio de San Juan de Letran (CSJL) Graduate School, which predicted a GDP contraction of 7.5 percent; Maybank, with -7.8 percent; and the World Bank (WB), -8.1 percent.
Morgan Stanley, the Asian Development Bank (ADB) and Goldman Sachs all predicted the economy would post a -8.5 percent growth last year; while the University of the Philippines (UP), Sun Life Financial (SLF), Philippine National Bank (PNB) and IHS Markit all came out with forecasts of between -8.6 percent and -8.9 percent.
BDO Unibank, Inc., De La Salle University (DLSU) and University of Asia and the Pacific (UA&P) projected that the country’s GDP would contract by 9.0 percent in 2020. ANZ Research was a little more pessimistic with a forecast of -9.1 percent.
Fitch Ratings, International Monetary Fund (IMF), Oxford Economics, Hongkong and Shanghai Banking Corp. (HSBC), Ateneo de Manila University (ADMU), Nomura Global Research, Moody’s, and Security Bank Corp. (SBC) released GDP forecasts of between -9.6 percent and -9.9 percent for 2020.
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