THE GOVERNMENT is retaining its lowered gross domestic product (GDP) target for 2021 as it aims for economic growth to breach 5% for the second half as lockdown restrictions are further loosened.
“Definitely, the DBCC (Development Budget Coordination Committee) is holding on to its target as we announced in the last meeting,” Finance Secretary Carlos G. Dominguez III said at a press briefing.
The government in August cut its economic growth target to 4-5% from 6-7% previously to reflect the effect of stricter mobility restrictions declared to curb the Delta-driven surge in coronavirus disease 2019 (COVID-19) cases in Metro Manila.
Since then, the government shifted to a new alert level system to allow more businesses to reopen in areas with low infection rates.
Finance Undersecretary and Chief Economist Gil S. Beltran said at the same briefing that the economy would have to grow by 5% to 5.5% in the second half of the year to reach the full-year target.
“We are now at 3.8% (as of first half), so it should be a little above 5% to be able to meet the higher end of the target,” he said.
The economy grew by 11.8% in the second quarter after falling 3.9% in the first three months of the year. It had exited recession in the second quarter after five straight quarters of decline.
Third-quarter GDP data will be announced on Nov. 9.
International organizations slashed their economic growth projections for the country as the Delta variant outbreak dampened consumer and business confidence.
The International Monetary Fund lowered its 2021 Philippine GDP forecast to 3.2%, from the 5.4% projection set in June. Fitch Ratings downgraded its projection to 4.4% from 5%, while the ASEAN+3 Macroeconomic Research Office cut its forecast to 4.3% from 6.4%.
The National Economic and Development Authority (NEDA) last week said that downgrading Metro Manila’s lockdown restrictions to the less strict Alert Level 2 could add P3.6 billion to the economy and 16,000 jobs each week. Lower alert levels allow for more mobility and business activity.
If moved further to Alert Level 1, another P10.3 billion would be added to the economy, along with 43,000 jobs each week, NEDA said.
“More and more people are living with the virus from the pandemic to endemic mode. And we think this is a very good opportunity to further open the economy, accept the virus as a part and parcel of our lives, and treat it like a flu that will come once in a while,” Socioeconomic Planning Secretary Karl Kendrick T. Chua said last week.
“The far majority have proven that they can live with the virus and stay safe, and contribute to the economy.”
Metro Manila will remain under the stricter Alert Level 3 until Nov. 14 to avoid a surge in COVID-19 cases.
The government is targeting to fully vaccinate 70 million by end-2021.
Around 26.8 million or 25% of the Philippine population has been fully vaccinated against the virus, the Johns Hopkins University tracker showed. — Jenina P. Ibanez