Duterte gov't tempers growth targets again as new lockdowns cripple economy
MANILA, Philippines — The Duterte administration’s growth outlook just got bleaker, as new lockdowns dash the government’s hopes for a strong and quick recovery this year from a pandemic-induced crash.
The inter-agency Development Budget Coordination Committee (DBCC) now expects gross domestic product (GDP) to grow 4-5% this year, abandoning their previous projection of 6-7%, according to a statement on Wednesday.
The DBCC retained their growth forecast for next year at 7-9%. Targets for 2023 and 2024 were unchanged at 6-7%.
This marked the second time the DBCC watered down this year’s targets from their initial goal of 6.5-7.5%. On both occasions, the downward revisions were prompted by the same development: a return to hard lockdowns to arrest a renewed surge in infections.
“Without the present spike, the original growth target of 6-7% would have been achievable,” economic managers said.
“However, with the global emergence of the Delta variant, the second half growth outlook was revised downwards to reflect the additional restrictions imposed by the government, which are necessary to curb its spread,” they added.
If anything, the downgrade of growth outlook was not surprising at all after GDP contracted 1.3% quarter-on-quarter in April-June period, a reversal from 0.3% sequential growth chalked up in the first quarter. Year-on-year, the economy grew 11.8% in the second quarter, with base effects from last year’s pandemic-induced slump magnifying the GDP print.
The depressing GDP performance in the second quarter was widely expected after Metro Manila and four nearby areas were placed under enhanced community quarantine (ECQ) — the strictest lockdown there is — from late March to mid-April to arrest a deadly surge of infections at the time.
But the Philippines is going full circle as Metro Manila and some provinces outside the capital region briefly returned to ECQ in August, this time to curb a flare-up of cases believed to be fueled by the highly-contagious Delta variant.
Already, analysts are expecting another sequential GDP slump in the third quarter.
- Latest
- Trending
