This was mainly attributed to multiple shocks to the economy such as the Taal Volcano eruption and the subsequent lockdown of Metro Manila (eventually the entire island of Luzon) due to COVID-19.

While the International Monetary Fund (IMF) projects the global economy to contract by 3% this year, experts believe that the Philippines could be on pace to further contract throughout the year with Bangko Sentral ng Pilipinas (BSP) Governor Benjamin Diokno stating that it could fall further in the second quarter.

Meanwhile, Fitch Ratings recently downgraded the country’s credit rating outlook from positive to stable citing the deterioration in the country’s macroeconomic and fiscal outlook due to the lockdown. The agency does note that the country’s BBB rating, above minimum investment grade, will continue to hold due to its lower government debt-to-GDP ratio, net debt position, and strong medium-to-long term growth prospects.