MANILA - The Philippine economy could grow by 5.3 percent this year but a further extension to the new Delta lockdown could hurt prospects, Fitch Solutions said Monday.
Lockdowns, which in the past have been extended, could hurt domestic spending in the country which is a major growth driver, Fitch Solutions senior country analyst Michal Langham told ANC.
"Another lockdown, unfortunately, again, that’s devastating for the Philippine economy. The Philippine economy is so driven by domestic activity. When they do impose these lockdowns it did disrupt growth," Langham said.
"Essentially a lot depends on the extent to which this lockdown extended," he added.
Metro Manila will be under lockdown or enhanced community quarantine (ECQ) from Aug. 6 to Aug. 20 to mitigate the spread of the new transmissible COVID-19 Delta variant.
When asked if the new pending stimulus package or the Bayanihan 3 could offset potential losses from the new lockdown, he noted that the economy "still fell rapidly" in 2020 despite Bayanihan 1.
"It really depends on how long the lockdown is in place and the size of the package relative to the economic loss," he said.
A higher vaccination rate is also another growth driver, he said.
The country's gross domestic product contracted by 9.6 percent last year.