The Philippines lowered its growth target for 2021 after the emergence of the COVID-19 Delta variant forced key cities to undergo another round of strict lockdowns.
The Development Budget Coordination Committee (DBCC) on Wednesday, August 18, revised its gross domestic product (GDP) growth assumption for 2021 to 4% to 5%, from the previous 6% to 7%, "in light of the reimposition of stricter mobility restrictions in various areas of the country to effectively address the heightened risks brought about by the COVID-19 Delta variant."
This is the second downward revision by the country's economic managers in 2021. The latest figures are now in line with previous pessimistic projections made by debt watchers and multilateral lenders.
The latest downward revision also means that the government no longer sees the economy returning to pre-pandemic levels in 2021.
The DBCC, however, retained its growth targets for 2022 at 7% to 9%, and for 2023 and 2024 at 6% to 7%.
The Philippines registered somewhat better-than-expected GDP growth in the second quarter of the year at 11.8%. However, on a quarter-on-quarter, seasonally adjusted basis, the economy contracted by 1.3%.
The second quarter growth should also be viewed in comparison to the massive 16.9% contraction in the same period in 2020, or the base effect.
The government was forced to implement enhanced community quarantine from August 6 to 20, the fourth time since the pandemic started in 2020.
The Philippines' chief economist Karl Chua earlier estimated the two-week lockdown would cost around P210 billion and result in at least 444,000 jobs lost.
"Our strategy is to continue managing the risks carefully by imposing granular quarantines, while allowing a vast number of people to earn a living. We will continue to use this period to accelerate the rollout of the vaccination program," the DBCC statement read. – Rappler.com