Despite the 11.8 percent surge in the second quarter, the Development Budget Coordination Committee (DBCC) yesterday slashed its growth assumption for the Philippines for the whole year mainly due to the implementation of tighter quarantine restrictions in various areas of the country to suppress the risks brought about by the coronavirus disease 2019 (COVID-19) Delta variant.
In a statement, the DBCC said it now see the country’s gross domestic product (GDP) for 2021 to hit between four and five percent, 2 percentage point lower from its earlier assumption of between six and seven percent, which was also revised downwards last May from the original forecast of between 6.5 and 7.5 percent.
“In the first half of 2021, our careful balancing of COVID-19 and non-COVID-19 risks allowed us to improve gross domestic product growth to 11.8 percent in Q2 2021. Without the present spike, the original growth target of six to seven percent would have been achievable,” the DBCC said.
“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.”
In the second quarter, the economy expanded by 11.8 percent, amid low base effects as it came from a decline of 17 percent in the same period last year, when tighter quarantine restrictions were also in place.
This is the highest GDP growth recorded since the fourth quarter of 1988.
On the production side, all sectors expanded except agriculture, which slightly contracted by 0.1 percent because of the decline in pork production. Meanwhile, the industry sector grew by 20.8 percent, and services by 9.6 percent.
The DBCC said the government’s strategy is to continue managing the risks carefully by imposing granular quarantines, while allowing a vast number of people to earn a living.
“We will continue to use this period to accelerate the roll-out of the vaccination program. As of August 15, a total of 27.8 million doses have been administered, consisting of 15.2 million and 12.6 million for the first and second dose, respectively,” the DBCC said, adding that they will “continue to work closely with the local government units and the private sector to accelerate the country’s vaccination rates.”
The DBCC pointed out that last August 5, the country recorded an all-time high of 710,482 jabs in a day while in the past week, the total average daily jabs reached more than 475,000.
“At this rate, and with recent vaccine deliveries arriving as scheduled, we are confident that we can inoculate the required number of individuals, particularly in the densely populated areas, by the end of 2021,” the DBCC said.
“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 added.
Meanwhile, the DBCC has retained its growth targets for 2022 at seven to nine percent, and for 2023 and 2024 at six to seven percent.
“The DBCC will continue to monitor the effects of the Delta variant and the enforcement of community quarantines, and proactively manage the risks to help the economy recover,” it said.
