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Thursday, August 19, 2021
The country’s Development Budget Coordination Committee (DBCC) on Wednesday revised its projection of its gross domestic product (GDP) growth assumption to 4-5% from the previous 6-7%, due to the reimposition of strict lockdowns brought by the risks of the COVID-19 Delta variant. The committee is composed of the Department of Budget and Management, Department of Finance, the National Economic and Development Authority, Office of the President, and the Central Bank of the Philippines.
This is the second negative revision done by Filipino economic managers this year. The previous target was made last May, which was then another revision of a target of 6.5-7.5% made last year. The latest figures are now in line with previous pessimistic predictions from global debt watchers and multilateral lenders like Fitch Solutions and Moody’s Analytics. The latest revision also means that the government no longer sees the national economy recovering back to pre-pandemic levels this year, looking forward to 2022 instead with its growth projections in the next years unchanged. 2022 has a projected growth of 7-9%, while 2023 and 2024 have a projected growth of 6-7%.
From August 6 to 20, an enhanced community quarantine (ECQ), which is the country’s own version of a strict lockdown, is in full force again on Metro Manila and the provinces of Bataan and Laguna over the spread of the Delta variant. This is the fourth time an ECQ was imposed since the pandemic started in March last year. Karl Chua, a chief economist, estimated earlier that the 14-day lockdown would result in at least 444,000 jobs lost, and cost the economy 210 billion pesos, or around 4.1 billion US dollars.
Despite the pessimistic projection, the Philippines registered a somewhat better-than-expected GDP growth in the 2nd quarter of 2021 at 11.8%, according to the Philippine Statistics Authority. When looked at a quarter-on-quarter, seasonally adjusted basis though, the national economy contracted by 1.3%. The 16.9% contraction in the same quarter of 2020 should also be taken into account, according to economist JC Punongbayan.
The DBCC says that mass vaccination will significantly help the country’s recovery, by reducing the need for lockdowns, especially in key economic centers like Metro Manila. 27.8 million doses has been administered in the Philippines, with 12.6 million Filipinos fully vaccinated. The government aims to vaccinate 50 to 70 million adult Filipinos to achieve herd immunity this year.
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