The Philippines may miss its target of a minimum of 6.5% economic process this year 2021 after a resurgence of Covid-19 infections which forced the National Capital Region into a two-week lockdown, Karl Chua said, the Economic Planning Secretary.

A man asking for help in Philippines during lockdown
A man asking for help in Philippines during lockdown

“We were a healthy economy before Covid. Now, we’re struggling,” Chua said in an interview Tuesday. “We were too risk averse: We pack up an enormous a part of the economy when other countries didn’t got to do this .”

The Philippines Finance Undersecretary Karl Chua Interview

The Philippines, which implemented one among the world’s longest and strictest lockdowns last year, suffered its worst-ever recession in 2020, prompting a push for a sustained reopening. First-quarter gross domestic product performance could also be on the brink of zero compared to a year earlier, but are going to be tons better than the ultimate three months of 2020, when the economy contracted 8.3%, Chua said.

Metro Manila and therefore the adjacent provinces of Bulacan, Cavite, Laguna and Rizal — the engine of the nation’s economy — were placed back in lockdown for 2 weeks from late March as daily cases surged to a record. Data due next month should guide economic managers in reviewing their full-year targets, Chua said.

The economy can still recover in coming months by reopening areas with fewer infections, accelerating government spending and speeding up vaccinations for front-line staff in sectors like transportation, tourism and manufacturing, Chua said.

“We will recover because we know the medicine and the dosage that will allow us to do so, and we will pursue that immediately,” the economic planning chief said. Movement restrictions this time are less stringent than the curbs imposed last year at the beginning of the pandemic, as public transport is now open and most employees can go to work, he said.

In December, economic managers projected that Philippine GDP would grow 6.5% to 7.5% this year, following last year’s record slump. Bangko Sentral ng Pilipinas Governor Benjamin Diokno, in a Bloomberg Television interview on April 8, said he estimates that the economy will grow 6%-7% this year.

The strict movement curbs in Manila and surrounding areas, which were eased starting April 12, could shave 0.8 percentage points off of full-year GDP and leave some 250,000 people jobless. A looser lockdown, where more businesses can open, is in place in the capital region and nearby provinces until the end of April.

Reference: BloomBerg