Philippines: Government cuts growth target on heightened virus risks

• Aug 19, 2021

MANILA, Philippines — The country’s economic managers further slashed the growth outlook for this year following the reimposition of stricter mobility restrictions in various parts of the country.

The Cabinet-level Development Budget Coordination Committee (DBCC) said yesterday its gross domestic product (GDP) growth target of six to seven percent has been compromised by the heightened risks brought about by the COVID-19 Delta variant.

The DBCC now anticipates the economy to expand by just four to five percent, depending on how the government manages the spread of the new variants.

It said the economy would have been able to achieve the six to seven percent growth if not for the tightening to enhanced community quarantine (ECQ) in select areas, particularly Metro Manila. The strategy now, it said, should be to widen the vaccination program to avert future lockdowns.

“In the first half of 2021, our careful balancing of COVID-19 and non-COVID-19 risks allowed us to improve the GDP growth to 11.8 percent in the [second quarter of] 2021. Without the present spike, the original growth target of six to seven percent would have been achievable,” the DBCC said.

“However, with the global emergence of the Delta variant, the second half growth outlook was revised downwards to reflect additional restrictions imposed by the government, which are necessary to curb its spread,” the DBCC added.

Based on estimates by the National Economic and Development Authority, the economy loses at least P150 billion for every week of ECQ as more than 600,000 workers have to either give up their jobs or clock in reduced hours, pushing about 250,000 individuals below the poverty line on lack of income.

The DBCC said the government would focus lockdowns on a localized level in the future to shield the economy from further damage resulting from area-wide ECQs. Likewise, it committed that the vaccination pace would be sped up to achieve herd immunity by the end of the year.

The DBCC said the government has administered a total of 27.8 million doses as of Aug. 15. Authorities plan to intensify their collaboration with local governments and the private sector to vaccinate at least 70 percent of the population within the year.

In the long term, the DBCC kept its growth targets for 2022 at seven to nine percent and for 2023 and 2024 at six to seven percent.

“The DBCC will continue to monitor the effects of the Delta variant and the enforcement of community quarantines and proactively manage the risks to help the economy recover,” the DBCC said.

Source: https://www.philstar.com/business/2021/08/19/2120948/government-cuts-growth-target-heightened-virus-risks