MANILA - Moody's Analytics is keeping its economic growth forecast for the Philippines but it warned of potential downward risk due to the new Delta COVID-19 variant, its economist said Tuesday.
The Philippines' gross domestic product could grow 4.8 percent this year but the country is "not out of the woods yet" due to the more transmissible COVID-19 delta variant, Moody’s Analytics senior Asia Pacific economist Katrina Ell told ANC.
The forecast is lower than the government projection of 6 to 7 percent.
"Downside risks are elevated much more so than the upside and I would say the Philippines is not out of the woods by any means and I would say there is still a significant threat to the expectation that GDP growth is going to perform 4.8 to 4.9 percent, which is what we’re expecting this year," Ell said.
"If we’re seeing that they [the cases] are maintained at the 5,000 level then we will maintain our forecast of almost 5 percent this year, but if we do see that those numbers start to climb more significantly, then we will be downward revising," she added.
At least 16 cases of the new variant were confirmed by the Department of Health on July 16.
A rise in cases of the more transmissible variant is likely to prompt authorities to impose more stringent quarantine measure that can hurt the economy.
In 2020, the GDP plunged 9.6 percent due to the pandemic and the resulting lockdowns.
Moody's is closely watching infection numbers as well as the country's vaccination campaign, which has been "sluggish" so far, Ell said.
At least 5 percent of the population has been vaccinated "which is incredibly low," she said.
The government aims to vaccinate at least 50 to 70 million of its 110 million population by the end of year. The Philippines, however, has been dealing with delays of vaccine arrivals.
The country's economic managers on Monday have kept the target growth rate of 6 to 7 percent despite the threat of the new COVID-19 Delta variant.