Reawakening the Philippines’ Economy
The Philippines' Development Budget Coordination Committee (DBCC) has updated the country's GDP forecast for 2021, setting the target for 6% to 7% growth following the sharp 4.2% drop in the first quarter this year.
The number is slightly higher than the Asian Development Bank's (ADB) outlook for the country at 4.5% and 5.5% in 2021 and 2022, respectively. However, the government expects to accomplish its goal by maintaining projected revenues at P2.88 trillion as economic activities gradually pick up over the medium term.
The Philippines’ Government Tactful Response
Public spending on social assistance and national infrastructure, alongside a steady COVID-19 vaccination rollout, would also play an essential role in pushing the Philippines' recovery to its track.
The investments in those three factors would snowball consumer and business confidence in putting their feet back in the field.
However, the risks of a prolonged pandemic as different COVID-19 variants enter the country still lingers to the uncertainties, both globally and domestically, posing a severe threat to the nation's growth projection.
In responding to the pandemic, the Philippines' government prioritizes addressing the disruptive impact of the pandemic on the private sector employees by setting adjustments to counter the adverse effects to support the labor market vulnerable to the condition.
The government's accommodative fiscal and monetary policy plans to assist the recovery of badly affected sectors such as agriculture and tourism to strengthen the sectors' foundation.
In addition, the ADB has also lent the country a total of USD 3.9 billion to implement programs according to the country's plan in supporting the local economic development and ease the burden of the heavily impacted labor force.
Inevitable Risks of COVID-19 Pandemic
Nevertheless, the Philippines ' growth is heavily reliant on the COVID-19 pandemic situation. The recent escalation of cases in mid-March imposed nationwide restrictive measures that once again put the country in a stalemate.
The total of people served by the new lockdown measures is rounded at over 26 million people, or equivalent to one-quarter of its population.
While the Philippines' forecast of positive growth and rebound in 2021 is visible, the country faces a multilayered challenge that stems from COVID-19 volatility.
Therefore, agile vaccination supply management is critical for the Philippines to achieve its growth projection and reawaken its economy.
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