• The Development Budget Coordination Committee cut its 2021 growth forecast for the Philippines to 4% to 5% from 6% to 7% previously
• The revision comes as stricter quarantine restrictions are reimposed nationwide to address heightened risks brought by the COVID-19 Delta variant
• Growth targets for 2022 remain at 7% to 9%, and for 2023 and 2024 at 6% to 7%
The Development Budget Coordination Committee (DBCC) has revised downward the Philippines’ economic growth projection for this year to 4% to 5% from the previous 6% to 7%.
The revision came in view of additional quarantine restrictions imposed by government to address heightened risks from the COVID-19 Delta variant, DBCC in a statement.
Without the present spike in cases, DBCC noted the original growth target of 6% to 7% “would have been achievable.”
The multi-agency body said the strategy now is to continue managing risks by imposing granular quarantines while allowing a vast number of people to earn a living. The government will also continue to use the heightened quarantine period to accelerate the roll-out of its vaccination program.
DBCC noted that as of August 15, a total of 27.8 million vaccine doses have been administered, consisting of 15.2 million first doses and 12.6 million second doses, respectively.
DBCC said it is confident that with total average daily jabs reaching more than 475,000, and with the recent deliveries of more vaccines, the required number of individuals, particularly in densely populated areas, will be reached by end-2021.
“We expect that this will significantly reduce the need for wide-scale quarantines, especially in key economic centers where the majority of Filipinos work,” DBCC said.
In this regard, DBCC retained its growth targets for 2022 at 7% to 9%, and for 2023 and 2024 at 6% to 7%.
DBCC last July adjusted its growth projection for goods exports from 8% to 10% following the expected recovery in external demand.
Meanwhile, the growth outlook for services exports in 2022 was revised from 6% to 7% in line with projected improvements in travel and business process outsourcing receipts due to the gradual reopening of the economy.
The growth forecast for services exports is maintained at 6% for 2021.
Services imports are projected to rise by 7% in 2021 and by 8% for 2022 to 2024.
Other macroeconomic assumptions were retained. For next year, goods exports are seen to expand by 6%. Goods imports are still expected to grow by 12% this year and 10% in 2022.
For 2023 to 2024, goods exports and imports are forecast to grow by 6% and 8%, respectively.
Revenue projections for the medium term were retained at P2.88 trillion for 2021 (14.5% of gross domestic product), P3.29 trillion for 2022 (14.9% of GDP), P3.59 trillion for 2023 (14.8% of GDP), and P4 trillion for 2024 (15.1% of GDP).
DBCC primarily reviews and approves the macroeconomic targets, revenue projections, borrowing level, aggregate budget level and expenditure priorities, and recommends to the Cabinet and the President the consolidated public sector financial position and the national government fiscal program.
