23 Aug 2021
The Philippines has reduced its economic growth targets for 2021, highlighting the impact of lockdowns in the metropolitan area of Manila for a fortnight to contain the spread of the Delta variant of coronavirus.
According to a statement by the Development Budget Coordinating Committee (DBCC), the growth target for this year has been lowered from the previous forecast of between 6.0% and 7.0% to between 4.0% and 5.0%.
The target for 2022 remains between 7.0% and 9.0%.
However, the downwardly revised figures are still a substantial improvement over 2020’s record 9.6% reduction.
“Our strategy is to continue to manage risk carefully by imposing fine-grained quarantine, while allowing a huge number of people to make a living,” said the DBCC, referring to the lockdowns.
“The road to a full recovery is still steep,” according to central bank governor Benjamin Diokno.
Nevertheless, the central bank will continue to do whatever is necessary to secure solid evidence of a full recovery, Diokno said in a statement. Last week policymakers stabilised benchmark interest rates at an all-time low of 2.0%.
Southeast Asia was one of Asia’s fastest growing economies before the Covid crisis, and managed to avoid recession in Q2 following a fifth straight quarter of contraction.
However, a new rise in coronavirus cases caused by the Delta variant led authorities to impose a lockdown in the metropolitan area of Manila for two weeks.
Over a year and a half after the pandemic hit, Covid cases in the Philippines surpassed 1.77 million, the second highest figure in Southeast Asia, whilst fatalities exceeded 30,600.
To date, around 11% of the 110 million Philippine population have been fully vaccinated.