Economic managers now see slower GDP growth this year
THE Philippine economy is expected to grow below the government’s target this year, according to economic managers, as the capital region and nearby provinces were placed under the strictest form of lockdown to curb the spike in coronavirus disease 2019 (COVID-19) cases.
“I think it (economic growth) is going to be lower than what we expected,” Finance Secretary Carlos G. Dominguez III said in an interview with Bloomberg TV on Tuesday.
Budget Secretary Wendel E. Avisado said in a Viber message that the Cabinet’s Economic Development Cluster will discuss the possible revision of current growth targets in its April 19 meeting. The Development Budget Coordination Committee (DBCC) has yet to schedule its meeting.
The DBCC has set a 6.5-7.5% growth target for this year and projected 8-10% growth in 2022. The economy contracted by a record 9.5% in 2020 as the Philippines implemented one of the world’s longest and strictest lockdowns.
The National Economic and Development Authority (NEDA) earlier estimated the two-week enhanced community quarantine (ECQ) in Metro Manila, Bulacan, Cavite, Laguna and Rizal may shave 0.8 percentage point off the gross domestic product (GDP) this year.
Shutting down the country’s main economic hub would translate to income loss of nearly P30 billion for the two-week period ending April 11, the NEDA said.
The shutdown resulted in 252,000 more Filipinos losing their jobs, while 102,000 more slipped into poverty.
“Enhanced community quarantine alone does not reduce cases. It simply buys time. Thus, we need to further intensify testing, tracing, quarantine, isolation, treatment, and vaccination,” Acting Socioeconomic Planning Secretary Karl Kendrick T. Chua said in a statement on Monday evening.
The Health department reported 9,373 new cases on Tuesday, bringing the number of active cases to 152,562.
Mr. Chua said extending the ECQ by one week would have helped prevent 215,320 additional COVID-19 cases, including 6,469 severe infections.
“We can also prevent 4,026 COVID-19 deaths,” he added.
The NEDA chief projected over 323,000 COVID-19 infections and 6,000 deaths will be prevented, if the country’s health systems will be strengthened while testing and isolation efforts are intensified during the strict lockdown.
Meanwhile, Mr. Chua said the government should boost and improve the health systems capacity; adopt better communication strategy; hasten vaccine rollout, especially to vulnerable sectors; and help all sectors prepare to shift to the “new normal.”
“Enforcing minimum health protocols and monitoring compliance, building more isolation facilities, accelerating vaccine deployment to the vulnerable sectors, and implementing the additional social amelioration program are all needed,” Mr. Chua added.
Multilateral institutions and other international organizations have slashed their growth forecasts for the Philippines already due to rising coronavirus cases.
The World Bank slashed its Philippine growth outlook to 5.5% for 2021 from 5.9% previously, while ASEAN+3 Macroeconomic Research Office (AMRO) cut its forecast to 6.9% from 7.4%. The United Nations Economic and Social Commission for Asia and the Pacific (UN-ESCAP) lowered its growth estimate for the Philippines to 6.5% from 7% previously. — Beatrice M. Laforga