Growth capped at 4% this year

Phl seen to lag behind in recovery

The Philippines will not be able to recover swiftly from the pandemic-induced recession this year due to uncertainties particularly on the vaccination program, an economist of the University of Asia and the Pacific (UA&P) said.

Gross domestic product growth (GDP) for this year is not expected to exceed four percent, way below government and market expectations of around six to eight percent, said UA&P economics professor Bernardo Villegas.

“The Philippines is going to be left behind by practically all of our neighbors. We are not going to recover that quickly this year because we have not managed the pandemic very well,” he said during a virtual forum.

“No, I don’t expect the growth rate for 2021 to exceed four percent. Some people are more optimistic,” he added.

The government expects the economy to have contracted between 8.5 and 9.5 percent last year because of the prolonged imposition of quarantines in various regions.

Coming from a low base, growth is seen to bounce back to between 6.5 to 7.5 percent this year and by eight percent to 10 percent in 2022.

Acting Socioeconomic Planning Secretary Karl Chua said recently, however, that the presence of a more contagious COVID-19 strain had not been factored into the revised assumptions made in December.

The economy has so far contracted by an average of 10 percent in three quarters. The government will report the full year economic performance next week.

The country remains under the world’s longest continuing lockdown meant to control the spread of COVID-19. Schools are still shuttered and many businesses operate in limited capacity in keeping with social distancing measures.

Villegas said uncertainties would continue to prevail well into the first semester beginning with the possibility of the wider spread of new COVID-19 variants in the country.

The first case of the more contagious UK variant had recently been detected in the country.

Issues on vaccine supply may also make it possible for viable vaccines to be available only by the last quarter of the year, prolonging restrictions and limiting economic activity, he said.

Recovery, he said, would depend largely on how businesses will be able to make the necessary adjustments to cope with the still challenging environment particularly on the technological front.