The Philippines may miss its target of at least 6.5% economic growth this year after a resurgence of Covid-19 infections forced the capital into a two-week lockdown, Economic Planning Secretary Karl Chua said.
“We were a healthy economy before COVID. Now, we’re struggling,” Chua said in an interview Tuesday. “We were too risk averse: We shut down a big part of the economy when other countries didn’t need to do that.”
The Philippines, which implemented one of 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 may be close to zero compared to a year earlier, but will be a lot better than the final three months of 2020, when the economy contracted 8.3%, Chua said.
Metro Manila and the adjacent provinces of Bulacan, Cavite, Laguna and Rizal — the engine of the nation’s economy — were placed back in lockdown for two 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.