The Philippines' economic recovery slowed in the second-quarter due to heightened restriction measures for Metro Manila and nearby provinces, the Department of Finance (DOF) said.
Finance Undersecretary and Chief Economist Gil S. Beltran said that while the economy grew by double-digits in April to June 2021, its momentum slipped during the quarter as gross domestic product (GDP) shrank a seasonally adjusted 1.3 percent.
The seasonally adjusted GDP figure has been described by Beltran as indicator if the economy might be on its way to recovery.
The finance official said the economic contraction seen on a quarter-on-quarter basis was “largely the result of the mobility restrictions” imposed in the so-called National Capital Region (NCR) Plus bubble.
To recall, the NCR Plus bubble, covering Metro Manila and four surrounding areas namely Bulacan, Rizal, Cavite and Laguna, was under enhanced community quarantine (ECQ) from March 29 to April 11, followed by a modified ECQ until May 14.
The seasonally adjusted GDP has been steadily slowing. In the first three-months of the year, it settled at 0.3 percent, down from 5.6 percent in the fourth quarter, and from eight percent in the third quarter last year.
Nicholas T. Mapa, ING Bank Manila senior economist said the economic outlook for 2021 is dimmed as recovery momentum started to fade despite the base effect-driven 11.8 percent growth last quarter.
Mapa noted that strict movement controls to manage the spread of the pandemic in April and August have derailed the economic recovery. “We can expect this trend to continue in the second half of the year.”
Beltran echoed Mapa’s assessment, saying the “re-imposition of stricter but localized quarantine measures will have consequences on economic activities in the third quarter.”
“Note, however, that unlike last year, this year’s stricter quarantine measures are much more localized,” he said.
Moreover, Beltran said the arrival of more vaccine supplies and the ramping up of the vaccination program will help provide boost to economic recovery.
“It is important that the risks posed by the epidemic be effectively managed to minimize the collateral damage on the economy and, consequently, people’s incomes,” he said.
Last April 11, Finance Secretary Carlos G. Dominguez III said he is still optimistic over the Philippines’ “promising” prospects for a strong economic rebound in 2021 owing to the government’s scaled-up vaccination program.
“Overall, prospects for a strong economic rebound in 2021 remain promising. Although there may be speed bumps ahead, we are well on our way to the path of solid recovery,” Dominguez said.
The government expects full-year economic growth to come in between 6.0 percent and 7.0 percent. To hit at least the low-end of the target, the economy should expand 8.2 percent in July to December.