BSP: Corporate sector to bounce back in 2021-2022
THE corporate sector is expected to start showing sustained signs of recovery starting this year and will continue up until 2022, the Bangko Sentral ng Pilipinas (BSP) said.
In a press briefing on Thursday, BSP Governor Benjamin Diokno said they have been closely monitoring the corporate sector, especially its potential impact on the local economy and on policy making.
“The corporate sector is expected to bounce back in 2021 and 2022 amid the gradual easing of business restrictions and the recovery of the Philippine economy,” Diokno said.
“The BSP is closely monitoring the impact of the Covid-19 pandemic on the corporate sector as its financial conditions have significant implications to the formulation of sound and well-informed monetary, financial and economic policies,” the governor added.
The pandemic has taken its toll on the corporate sector as firms reported net losses and declines in net income in 2020, reflecting the impact of the crisis, which forced prolonged lockdowns that paralyzed many business operations and restricted mobility.
‘Strong but partial’ recovery
In a separate statement, Bank of the Philippine Islands (BPI) lead economist Jun Neri said recovery will likely be “strong but partial” in 2021. The strength of this recovery is also pinned on the government’s ability to roll out vaccines this year.
“We are expecting a 6.8-percent GDP growth for 2021, but our assumptions there are that the vaccine rollout will be able to cover not less than one-fourth of the population by end 2021, that the stimulus is meaningful enough, and that mobility will be on a sustained uptrend,” Neri said.
In terms of total output, Neri said that the country’s 2021 GDP will not yet be at the same level as the previous year’s GDP.
“We will only be able to fully recover sometime in the later part of 2022. And that’s what makes the Philippines quite unique. It is because we saw the biggest decline in Southeast Asia in overall GDP,” he said.
Neri emphasized that the first indicator of economic improvement is mobility, just as production responds positively to the easing of quarantine measures.