COVID-19 variants force Philippines to trim economic growth targets

The Philippines' economic managers again trimmed economic growth targets, as more infectious coronavirus variants forced the country to reimpose lockdowns.

The Development Budget Coordination Committee (DBCC) slightly revised downward the 2021 gross domestic product (GDP) growth projection. From 6.5% to 7.5%, the new target range is now 6% to 7%.

For the government to hit that target, GDP must grow 10% for three consecutive quarters, after a sharp 4.2% drop in the first quarter.

In 2020, the economy shrank a record 9.6%. The contraction was revised from the initial 9.5%.

Revenues, disbursements

Meanwhile, projected revenues were maintained at P2.88 trillion for 2021 and increased to P3.29 trillion for 2022. 

As economic activities are expected to pick up over the medium term, revenue collections were pegged at P3.59 trillion and P4 trillion for 2023 and 2024, respectively.

Estimated disbursements for 2021 have been adjusted upwards from P4.66 trillion to P4.74 trillion, owing mainly to funding requirements to support the Bayanihan to Recover as One Act, including the procurement of COVID-19 vaccines.

Disbursements are projected to reach P4.95 trillion in 2022, and further increase to P5.11 trillion in 2023 and P5.40 trillion in 2024.

Given the revised revenue and disbursement program, the deficit program was adjusted upwards to 9.4% of GDP and 7.7% of GDP for 2021 and 2022, respectively. 

The economic team aims to gradually bring the deficit back to pre-COVID-19 levels with a projected 6.4% of GDP in 2023 and 5.4% of GDP in 2024. – Rappler.com

Ralf Rivas

A sociologist by heart, a journalist by profession. Ralf is Rappler's business reporter, covering macroeconomy, government finance, companies, and agriculture.

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