MANILA - The Philippine economy could see a "deeper decline" this year due to the COVID-19 pandemic before recovering in 2021, according to a new study by the Asian Development Bank.

In a statement, the ADB lowered its 2020 gross domestic product forecast for the Philippines to a contraction of 7.3 percent from its June estimate of a 3.8 percent drop.

The revision was mainly due to subdued private consumption and investment for the rest of the year on "uncertainties about the global economic recovery," the ADB said.

The Philippine government estimated that the economy could shrink to as much as 5.5 percent. Remittances could contract by 5 percent this year, Bangko Sentral ng Pilipinas Gov. Benjamin Diokno earlier said.

Growth could return to 6.5 percent in 2021 once the outbreak is contained and the economy further reopens, the study released Tuesday showed.

Downside risks include slower global recovery that may drag trade, investment and remittance, it said.

The worst is "over" and GDP contractions may have "bottomed out" in May or June, said ADB country director for the Philippines Kelly Bird.

“We expect the recovery to be slow and fragile for the rest of this year, and growth to accelerate in 2021 on the back of additional fiscal support and an accommodative monetary policy stance,” Bird added.

The Philippine economy plunged into recession following a steep 16.5 percent contraction during the second quarter.

Metro Manila and several neighboring areas remain under general community quarantine until Sept. 30 while majority of the country are already under modified GCQ.

• Philippines falls into recession as second quarter GDP dives 16.5 percent