MANILA - The Philippines is unlikely to hit its growth target this year because of the recent surge in COVID-19 cases and the strict quarantine restrictions imposed to curb this, Fitch Solutions said on Monday.
Fitch initially forecast that the Philippine economy would grow 7.6 percent this year, and 6.8 percent next year.
But Michael Langham, senior country risk analyst at Fitch Solutions, said this was "definitely looking less likely now."
"Risks are definitely tilted to the downside, unfortunately," Langham said in an interview with ANC Market Edge.
Langham said that the resurgence in COVID-19 cases may force the government to divert funds from infrastructure to efforts to combat the spread of the disease.
"The infrastructure investment, that we’ve talked about driving growth, a lot of those investments would have to be diverted back to COVID outbreak and fighting that," Langham said.
"So effectively, what’s happening is that the Philippine recovery is being delayed," he added.
Moody's Investors Service, on Monday, also said that the recovery of the Philippine economy would be delayed by the spike in virus cases and the lockdowns imposed to curb COVID-19's spread.
Last week the World Bank also lowered its growth forecast for the Philippines this year citing the spike in COVID-19 cases.
Philippine economic managers have hinted that GDP growth was likely to remain negative in the first quarter, but would bounce back in the second quarter as the economy reopened.
But this was before the number of new and active COVID-19 cases rose in recent days, to their highest level since the start of the pandemic, prompting the government to reimpose strict quarantine measures in Metro Manila and adjacent provinces, which generate over a third of the country's GDP.
The Philippine economy posted its worst contraction since World War 2 in 2020.