As the country’s economic center is placed under strict lockdowns, the full-year gross domestic forecast may likely be revised lower from the earlier range of between 6.5 percent and 7.5 percent.
Benjamin Diokno, Bangko Sentral ng Pilipinas Governor, said during the Laging Handa Public Briefing yesterday that the likely revision would be discussed during the April meeting of the Development Budget Coordination Committee.
“Depending on the results of placing NCR Plus under enhanced community quarantine (ECQ), sa aking tantiya baka ibaba ng kaunti to between 6 percent and 7 percent,” Diokno said.
National Capital Region and the provinces of Bulacan, Cavite, Laguna and Rizal, or what is collectively called the NCR Plus, were placed under ECQ last March 29 as the number of coronavirus diseas (COVID-19) cases surged. The lockdown was supposed to be for just one week but was later extended by another week.
On Sunday, the government eased the restrictions to modified enhanced community quarantine (MECQ) until the end of this month
Diokno also allayed fears that the Philippine economic performance will be the worst in the Asian region.
“The IMF (International Monetary Fund) recently raised its (GDP) forecast (for the Philippines for 2021). This coincides with the December DBCC forecast range of between 6.5 percent and 7.5 percent,” Diokno said.
The IMF’s April World Economic Outlook released last April 5 projects the Philippine economy to grow at 6.9 percent in 2021, higher than the earlier forecast of 6.6 percent made last January.
For 2022, IMF sees the Philippine economy to grow by 6.5 percent, unchanged from the January forecast.
Diokno said based on DBCC projections, the economy will likely grow from between 8 percent and 10 percent next year.
The IMF Executive Board, based on the latest Financial System Stability Assessment with the Philippines, said the economy “faces both COVID-related and structural risks.”
“Real GDP contracted by 9.5 percent in 2020–a much steeper decline than during the Asian Financial Crisis. However, it is now recovering, and macroeconomic fundamentals at the onset of the COVID-19 were stronger than in the late 1990s,” IMF said.
“The Philippines is also vulnerable to increased typhoon risks from climate change owing to its geographical position,” IMF added.
Diokno stressed that the country’s economy was on a better position before the pandemic.
“Sometime in 2022, we will be where we were before in 2019. That depends on how fast the government will deploy the vaccines.” Diokno said.
“We expect that the economy will recover. In fact, not necessarily this quarter but the second quarter and this will continue,” Diokno stressed.
