Economic Projections Lowered to 6-7% for 2020 and 7-9% for 2021

The Duterte administration’s economic outlooks for the country have been lowered as more infectious coronavirus variants emerge and stricter localized lockdowns were implemented earlier in the year.

For 2021, full-year economic growth is forecast at 6-7% down from the 6.5-7.5% reported in December of 2020. The growth target for the following year, on the other hand, is set at 7-9% dropping from the more optimistic 8-10%.

The economy experienced a record contraction of 9.6% year-on-year in 2020 while the first quarter of 2021 saw a slump of 4.2%.

Despite the scaling down of economic outlooks, the Philippines would still have to grow by an average of 10% over the remaining three quarters of the year to hit the marks, which is much easier said than done according to Socioeconomic Planning Secretary Karl Kendrick Chua.

In this light, the Development Budget Coordination Committee is banking on the continued vaccination rollout to boost gross domestic product (GDP) output, especially in the NCR Plus Bubble. Metro Manila, Bulacan, Cavite, Laguna, and Rizal have since been put under general community quarantine with heightened restriction until May 31.

More than 3 million vaccine doses have been administered and inoculations over the past weeks have seen improvements as new batches of vaccines arrive in the country. However, the 3 million vaccinations only translate to 2% of the population when put against the government’s goal of inoculating 70 million people to achieve herd immunity.

The administration’s economic managers have also adjusted macroeconomic assumptions and spending plans aside from the GDP targets.

Source: PhilStar