The government is not yet abandoning its growth target for the year as the National Economic and Development Authority (NEDA) believes there is still time to recover the losses incurred from recent lockdowns.
Socioeconomic Planning Secretary Karl Kendrick T. Chua said on Monday, April 26 that any downward revision of the gross domestic product (GDP) target will depend on the first-quarter economic performance.
Chua said the GDP may still expand by 6.5 percent to 7.5 percent given the “different” scenario during the latest enhanced community quarantine (ECQ) and modified enhanced community quarantine (MECQ) period.
“Right now we are enforcing an ECQ and an MECQ, but it is different from last year. We allow people to work, our public transport is functional, construction is ongoing. There are some changes from how we experienced quarantine last year,” Chua said.
While ECQ and MECQ are drags to the pace of economic recovery, the newly promoted NEDA chief said the country has eight-months to recoup losses from lockdowns in Metro Manila and nearby provinces in March to April.
“We are still early in the year, I think, to make changes. We have not yet seen the impact of ECQ and our quarantine on the first quarter, so I would wait for more data,” Chua said. “We still have eight full months of the year to recover.”
For the remaining months of 2021, Chua said the government has an array of measures to maximize the economic recovery.
“The first one is a more risk managed approach to dealing with the virus, instead of quarantine the entire area, we can have more localized quarantine that addresses the areas or sectors, with the highest risk, instead of affecting everyone,” Chua said.
“The second is we have a package of recovery measures, amounting to around 15 percent of GDP. The goal here is to accelerate the delivery of this important recovery package,” he further said.
“The third one is we continue our vaccination program so that we continue to reduce the risks, especially for senior citizens, and those with poor comorbidities so that the overall population can be allowed to work with the lowest responsible,” he concluded.
Based on the NEDA’s estimates, the reimposition of two-week ECQ may slash the country’s full-year economic growth by 0.8 percentage point in 2021.