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Philippines – Diokno: Recovery remains fragile
MANILA, Philippines — The country’s recovery remains fragile despite emerging from the pandemic-induced recession in the second quarter with a gross domestic product (GDP) growth of 11.8 percent, according to Bangko Sentral ng Pilipinas (BSP) Governor Benjamin Diokno.
“While the economy has turned the corner, the recovery remains fragile,” Diokno said in an interview with Bloomberg TV.
The Philippines exited the recession with a strong growth of 11.8 percent in the second quarter.
However, despite the favorable performance in the second quarter, economists lowered their growth forecasts for 2021 as the quarter-on-quarter seasonally adjusted GDP contracted by 1.3 percent in the second quarter.
“Most analysts who have downgraded the Philippines are looking at past data,” Diokno added.
The BSP chief said the key to sustained recovery is a successful COVID-19 vaccine rollout.
“There are many reasons for optimism. For example, we expect to get some 60 million doses before the end of the month. The national government, along with the local governments and the private sector, has shown its ability to administer the vaccination program,” he said.
According to Diokno, the country could now administer about 700,000 doses per day from only 25,000 doses daily at the start of the vaccination program.
Another source of optimism, he added, is that the Philippines has multiple sources of COVID-19 vaccines including Pfizer, AstraZeneca, Moderna, Johnson & Johnson, Sinovac, Sinopharm and Sputnik.
“Other countries have only one or two suppliers. And the other thing is that we have very little resistance on the part of Filipinos to get vaccinated,” Diokno said.
For the remainder of 2021, the BSP chief said about 148 million doses of COVID-19 vaccines are scheduled to arrive in the country.
“So we are optimistic that before the end of the year, we will be able to inoculate 70 million Filipinos or that is the entire adult population. So to me that is the key, the pace of vaccination,” he said.
To meet the six to seven percent GDP growth target set by economic managers, Diokno said the country’s output must expand by 8.2 percent in the second half.
“We have to hit 8.2 percent for the second half of the year in order to meet the six percent. So that’s doable. But as I said, we really have to complete our vaccination program. And the target is that we will complete the vaccination program on or before the end of this year,” the BSP chief said.
The central bank has committed to do whatever it takes including keeping monetary policy accommodative until necessary or until the Philippine economy fully recovers from the impact of the COVID-19 pandemic.
The Monetary Board has kept interest rates untouched for the past six rate-setting meetings to boost lending and stimulate economic activity in the country.
Source: https://www.philstar.com/business/2021/08/18/2120683/diokno-recovery-remains-fragile