BANKING giant HSBC slashed its Philippine gross domestic product (GDP) growth estimate for this year after factoring in the economic impact of the rising coronavirus disease 2019 (Covid-19) infections this month.
“We recently reduced our real GDP growth forecast for 2021 to 6.3 percent from 6.5 percent implying the economy won’t be back to its pre-pandemic levels until end-2022,” HSBC economist Noelan Arbis noted in a report released on Friday.
HSBC’s revised projection falls below the government’s official forecast range of 6.5 to 7.5 percent, but a reversal of the economy’s 9.5-percent contraction in 2020.
“The Philippines continues to struggle with the pandemic,” Arbis also pointed out.
While the “winter surge” has receded in other parts of Asia, Arbis said the number of new Covid-19 cases in the Philippines has increased significantly since the beginning of March.
Arbis cited, for instance, the 5,404 new infections recorded on March 15, which is the fourth-highest single-day infection tally the country recorded and the highest since 5,277 on August 26.
The past week has seen the daily infection toll consistently surpassing the 4,000 mark, sparking fears of a return to stricter quarantines. It also prompted local government officials to impose localized lockdowns and a uniform nighttime curfew in an attempt to keep cases from rising.
With these, the HSBC economist said the average mobility in the Philippines now ranks the lowest across Asia-Pacific.
“Recent developments greatly impede the economy’s path to recovery,” he continued.
Arbis said as Metro Manila accounts for nearly 40 percent of the country’s GDP, renewed lockdowns are also likely to limit private consumption and fixed investments — two of the Philippines’ main growth drivers