MANILA - Philippine economic managers have again lowered the growth target for 2021 due to the effects of the pandemic.
The National Economic and Development Authority said that the government is now looking at 4 to 5 percent growth this year, down from 6 to 7 percent growth announced earlier. This was also lower than the 6.5 to 7.5 percent target set at the start of the year.
NEDA said the cabinet-level Development Budget Coordination Committee (DBCC) made the revision "in light of the reimposition of stricter mobility restrictions in various areas of the country to effectively address the heightened risks brought about by the COVID-19 Delta variant."
NEDA said that without the present spike, the original growth target of 6 to 7 percent would have been achievable.
"However, with the global emergence of the Delta variant, the second half growth outlook was revised downwards to reflect the additional restrictions imposed by the government, which are necessary to curb its spread."
Gross domestic product grew 11.8 percent year-on-year in the second quarter, primarily due to low base effects following a record 17 percent contraction in the same period last year.
However, in terms of quarter-on-quarter growth, second-quarter GDP actually shrank a seasonally adjusted 1.3 percent from the first quarter.
"Our strategy is to continue managing the risks carefully by imposing granular quarantines, while allowing a vast number of people to earn a living," the DBCC said.
The DBCC, which is composed of the finance, budget and economic development departments and the central bank, sets the country's macroeconomic assumptions, which guide policies.
It said that at the current pace of vaccinations the government can "inoculate the required number of individuals, particularly in the densely populated areas, by the end of 2021."
"We expect that this will significantly reduce the need for wide-scale quarantines, especially in key economic centers where the majority of Filipinos work," it said.
The government is targeting to fully vaccinate 58 million adults by the end of the year to achieve what it calls "population protection."
The DBCC meanwhile retained its growth targets for 2022 at 7 to 9 percent, and for 2023 and 2024 at 6 to 7 percent.