THE Philippine economy could be at risk from reopening too early while infection levels rise, according to Nomura Global Market Research.

“Since the relaxations, the rise in daily new cases has unfortunately accelerated, suggesting increased transmission risk as mobility has increased,” it said in a note issued Monday.

“This poses downside risks to our growth forecast due to a prolonged COVID-19 outbreak as a result of the premature reopening, particularly as the remaining hot spots are in major cities like Manila and Cebu,” it added.

Nomura Global projected a contraction of 4.8% in 2020 in May, a reversal from its 6.7% baseline growth forecast issued last year. This is also a more pessimistic outlook than the official 2-3.4% contraction projected by the government.

The firm expects the second quarter to post the biggest contraction of 11.5%, followed by contractions of 5.4% and 2.1% in the third and fourth quarter, respectively.

Coronavirus disease 2019 (COVID-19) infections have risen by 2,124 to 56,259 as of Sunday, according to health officials. University of the Philippines researchers forecast infection totals of 60,000 by the end of July.

Nomura Global said mobility in major Philippine business cities has been plateauing and could even drop soon as fears emerge of new lockdowns.

“In our recent survey of corporates in ASEAN, businesses in the Philippines see the lowest pick-up in operating capacity in the coming months compared with regional peers,” it said.

The report also noted that Congress has yet to hold a special session during its recess to discuss stimulus bills which further contribute downside growth risks.

Nomura Global earlier flagged the Philippines for having one of the smallest fiscal packages in the region for COVID-19 containment measures, alongside Indonesia and India. — Luz Wendy T. Noble