By Bernadette D. Nicolas, August 18, 2021; Business Mirror
The government’s economic team decided to forgo its 6- to 7-percent growth target for the Philippine economy this year following the reimposition of lockdowns to curb the spread of the more contagious Covid-19 Delta variant.
The Cabinet-level Development Budget Coordination Committee (DBCC) announced on Wednesday that it has cut its GDP growth target this year to 4 to 5 percent.
If not for the recent surge in Covid-19 cases, the economic team said their original growth target could have been attainable.
“Without the present spike, the original growth target of 6.0 to 7.0 percent would have been achievable. However, with the global emergence of the Delta variant, the second-half growth outlook was revised downwards to reflect the additional restrictions imposed by the government, which are necessary to curb its spread,” it said in a statement.
Meanwhile, the DBCC retained its growth targets for 2022 at 7 to 9 percent, and for 2023 and 2024 at 6 to 7 percent. The Philippine economy grew by 11.8 percent in the second quarter this year, the highest since the fourth quarter of 1988 when the economy grew 12 percent.
The Philippine Statistics Authority said the country’s GDP growth averaged 3.7 percent in the first semester, using constant 2018 prices. National Statistician Claire Dennis S. Mapa earlier said the economy needed to post growth of 8.2 percent in the second half of the year to hit the government’s low-end GDP growth target of 6 percent. To hit its revised GDP growth target this year, the DBCC said they are banking on carefully managing risks by imposing granular quarantines to allow a vast number of people to earn a living.
At the same time, it also said it will continue to accelerate the country’s vaccination rates.
The government aims to vaccinate 50 million to 70 million of the country’s adult population to achieve population protection this year. As of August 15, a total of 27.8 million doses have been administered, consisting of 15.2 million and 12.6 million for the first and second dose, respectively.
“Last August 5, the country recorded an all-time high of 710,482 jabs in a day, while in the past week, the total average daily jabs reached more than 475,000. At this rate, and with recent vaccine deliveries arriving as scheduled, we are confident that we can inoculate the required number of individuals, particularly in the densely populated areas, by the end of 2021,” the DBCC said. As more individuals get inoculated, the DBCC said “this will significantly reduce the need for wide-scale quarantines, especially in key economic centers where the majority of Filipinos work.”
International think tank Fitch Solutions recently slashed its growth forecast for the Philippines to 4.2 percent, down from its earlier projection of 5.3 percent, citing continued disruptions to output from rising Covid-19 cases.
Another international think tank Moody’s Analytics earlier said the country’s growth in the second quarter of the year proved to be “disappointing,” bolstering their view that the Philippines will be among the last countries in Asia to recover economically. The research firm also lamented the slow pace of the vaccination rollout remains a major drag and a downside risk to the Philippines’s economic recovery as only 10 percent of the total adult population of the country is fully vaccinated.
Last year, the Philippine economy contracted 9.6 percent, the worst recorded since World War II.