GROSS domestic product (GDP) in 2020 is likely to contract 8-9% due to the pandemic, positioning the economy for a rebound off a low base in 2021 with fundamentals largely intact, according to participants at a First Metro Investment Corp. (FMIC) briefing.

“The third quarter is still going to be negative and fourth quarter will be a much smaller negative depending on how firms and people respond to opening up the economy,” University of Asia and the Pacific (UA&P) Professor Victor A. Abola said at the FMIC’s virtual mid-year Economic and Capital Markets Briefing Wednesday.

FMIC’s original 2020 growth outlook was 6.2% issued in January. The 8-9% contraction forecast positions FMIC as far more pessimistic than the official government projection of -5.5%.

The investment banking unit of the Metrobank Group also expects cash remittances to shrink by 8% to 9% this year, much worse than the 5% contraction projected by the central bank.

Panelists at the briefing said the Philippines is in a stronger position compared to previous crises, with sufficient buffers to withstand the pandemic.

“The speed of recovery will depend on our quick and strategic moves to overcome the bottlenecks in supply chains, revising our business models, and the response to the digitization challenge,” Mr. Abola said.

Meanwhile, Bernardo M. Villegas, also of the UA&P, said the pandemic has shown what the country needs to pay more attention to, including food security and the development of critical technical skills.

Mr. Villegas said industries that will likely gain traction in a recovering economy are food and agri-business, health and wellness, and fields related to digitization and education. He said travel and tourism, retail, and restaurants will likely take a longer time to return to growth.

“Even when the vaccine is found, Filipinos will still be very hesitant to dine out to go to the mall,” he said.

Mr. Villegas also said the pandemic has clarified to investors the need to look outside Metro Manila. — Luz Wendy T. Noble