Philippines cuts 2021 economic growth targets

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.