MANILA – The Philippine economy has ample time to grow as much as 7.5 percent this year after imposing managed lockdowns which allowed exemptions for transport and other businesses, an economic manager said Monday.
During the virtual pre-State of the Nation Address forum, Socioeconomic Planning Secretary Karl Chua said it’s too early to change the forecast as the country still has 8 more months to catch up on growth.
“We are still early in the year to make changes. We have not yet seen the impact of ECQ in Q1…Although this ECQ and MECQ period may affect our growth, on the other hand, we still have 8 full months to recover,” said Chua.
Economic managers earlier projected 6.5 percent to 7.5 percent growth in 2021, after the country's gross domestic product contracted by 9.6 percent in 2020 due to the pandemic.
Enhanced community quarantine was imposed in late March after confirmed COVID-19 daily cases surged. The lockdown was lowered to the less strict modified ECQ until the end of the month.
This year’s lockdowns were also different compared to the 2020 ECQ where almost every industry was put to a halt, said Chua, who is also head of the National Economic and Development Authority.
Prior to the heightened quarantine measures imposed this year, the Philippines made “significant improvements,” said Chua, citing trade gains as well as the recovery of jobs lost due to quarantine measures last year.
Last January, Chua said that the economy would likely post positive growth only in the second quarter as the country was off to "a slow start" in the first three months of 2021.
Meanwhile, Bangko Sentral ng Pilipinas Governor Benjamin Diokno made a lower growth forecast.
From the target 6.5 percent to 7.5 percent growth, the economy could grow to only 6 percent to 7 percent due to the ECQ and MECQ imposed in the NCR Bubble, which is composed of the National Capital Region, Cavite, Laguna, Bulacan and Rizal, Diokno said.
Diokno however maintained that the Philippines had solid economic fundamentals.
“The impact of the COVID-19 crisis on the economy will be transitory. Our fundamentals remain solid and this will carry us to full economy,” Diokno said during the forum.
In order to reach the target GDP this year, Chua said the country needs a more “risk managed” approach in dealing with the virus using more localized quarantines instead of putting everyone on lockdown.
The government also plans to use recovery package measures which is equivalent to 15 percent of GDP, including funds from its COVID-19 response law – Bayanihan 2.
For 2022, the GDP could grow to as much as 8 percent to 10 percent, Chua said.
The Philippine Statistics Authority is set to announce GDP numbers for the first quarter in May.