UPDATE 1-Philippine economy to suffer first annual contraction in over 2 decades -cenbank

* Philippine economy to decelerate in 2020, recover in 2021
* First annual GDP decline since Asian financial crisis
* Philippine capital, key cities under extended lockdown

(Recasts lead, adds details, background)
MANILA, April 25 (Reuters) - The coronavirus outbreak will
likely send the Philippine economy into its first annual
contraction in more than two decades this year, before it pulls
back up for a U-shaped recovery in 2021, the central bank
governor said on Saturday.
Key cities in the Philippines, among the fastest growing
economies in Asia during the pre-pandemic period, are under
strict quarantine measures since mid-March.
Philippine gross domestic product would likely shrink by
0.2% in 2020 before bouncing back to about 7.7% as policy
support measures gain traction, central bank Governor Benjamin
Diokno said in a statement.
That would mark a sharp reversal from the government's
initial annual growth target of between 6.5% and 7.5% for 2020
to 2022.
The economic recovery would follow a U-shaped path in 2021,
following a slowdown in the first quarter and contractions in
the next two quarters of this year, Diokno said. "The strong
recovery is based on the assumption that the pandemic is
contained in the second half of 2020."
Philippines President Rodrigo Duterte on Friday extended a
strict lockdown in the capital Manila and key cities until May
15 to try to contain the spread of the coronavirus, which has so
far killed 477 people and infected 7,192 in the country.
Given the collapse of world crude prices, and the
coronavirus' impact on global and domestic growth prospects,
inflation would average 2.0% this year, down from the previous
2.2% forecast, the central bank said.
Inflation is then expected to accelerate to an average of
2.45% for 2021, slightly up from the previous forecast of 2.4%,
as domestic activity picks up and more cash flows through the
economy, it added.