S&P Global Ratings expects the Philippine economy to shrink by 0.2% this year as the world comes to grips with the human and economic price of the novel coronavirus pandemic.

The expected contraction compares with the flat growth or a contraction of as much as 1% estimated by Finance Secretary Carlos G. Dominguez before the one-month Luzon-wide lockdown was extended until April 30.

“There are no shortcuts, no silver bullets to help us understand what the human and economic price of the COVID-19 pandemic will be,” S&P said in a report dated April 16.

“Only with experience and data can we learn the key lessons, among them: how long lockdowns need to last, how economies can reopen before a lasting medical solution is found, and what lasting imprint this episode will leave across the global economy,” it added.

“Tracking this crisis requires constant updating of our assumptions and models to help understand what the broad contours of pandemic will look like over the coming years,” the rating company said.

Meanwhile, S&P upgraded its 2021 growth forecast for the country to 9%. It cut its 2020 growth projection for Asia Pacific to 0.3%.

“Our forecasts now imply a loss in household and corporate income of about $2.2 trillion in Asia], which will be distributed across balance sheets,” it said.

“We expect economies to enter a transition period where social distancing measures will be along a continuum between full lockdowns and business-as-usual until mid-2021,” it added.

It may take until 2023 for economic activities in the region to normalize, S&P said.

S&P’s new forecasts assumed that the first wave of the outbreak peaked in China and will peak in April for most economies in Asia Pacific

It estimates that reported cases will peak early in the third quarter for some emerging markets, including India and Indonesia.

The COVID-19 virus has sickened 2.2 million and killed more than 147,000 people worldwide, according to the Worldometers website, citing various sources including data from the World Health Organization.

S&P warned of rising joblessness amid the continued shutdown of businesses due to lockdowns in many economies.

“A surge in unemployment, say by more than 4 percentage points, would mean a much flatter recovery path in Asia-Pacific,” it said. “Consumption would be lower, saving would be higher, and stress may emerge among some of the region’s more leverage household sectors,” it said.

The debt watcher expects the Philippine jobless rate to rise to 6.8% this year.

The Philippine government initially targeted 6.5% to 7.5% growth this year before the outbreak occurred. — Luz Wendy T. Noble