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Philippines slashes 2021 economic growth target due to lockdown

Philippines slashes 2021 economic growth target due to lockdown

FILE PHOTO: People wearing masks for protection against the coronavirus disease (COVID-19) pass a mural dedicated to healthcare workers, in Pasig City, Metro Manila, Philippines, October 30, 2020. REUTERS/Eloisa Lopez

MANILA : The Philippines lowered its economic growth target for this year, reflecting the impact of a two-week lockdown of the capital region to contain the spread of the Delta coronavirus variant, a government inter-agency panel said on Wednesday.

This year's growth target was cut to 4.0per cent to 5.0per cent, from 6.0per cent to 7.0per cent expected previously, the Development Budget Coordination Committee (DBCC) said in a statement.

Next year's growth target was kept at 7.0per cent to 9.0per cent.

The downgrade was still a significant improvement from last year's record contraction of 9.6per cent. https://www.reuters.com/article/philippines-economy-gdp-idINL4N2M11V5

"Our strategy is to continue managing the risks carefully by imposing granular quarantines, while allowing a vast number of people to earn a living," the DBCC said, referring to lockdown measures.

Central bank Governor Benjamin Diokno said "the road to full recovery remains bumpy."

But the central bank will continue to do what is needed until there is hard evidence of full recovery, Diokno said in a statement.

Policymakers last week kept the benchmark interest rate steady at a record low of 2.0per cent https://www.reuters.com/article/philippines-economy-rates/update-2-philippine-c-bank-vows-to-maintain-policy-support-amid-covid-19-surge-idUSL1N2PJ0IC, providing monetary support for an economic recovery.

The Southeast Asian nation, which was among the fastest growing economies in Asia before the pandemic, exited recession in the second quarter https://www.reuters.com/article/philippines-economy-gdp-idUSL1N2PH04H after five consecutive quarters of contraction.

But a renewed surge in COVID-19 cases, driven by the Delta variant, forced authorities to impose a two-week lockdown of the capital region https://www.reuters.com/world/asia-pacific/manila-locks-down-philippines-virus-cases-near-four-month-high-2021-08-06/#:~:text=MANILAper cent2Cper cent20Augper cent206per cent20,infectionsper cent20forper cent20almostper cent20fourper cent20months from Aug. 6., undermining the economy's expected rebound this year.

More than a year and a half into the pandemic, reported coronavirus infections in the Philippines have reached more than 1.77 million, the second-highest level in Southeast Asia, while deaths have exceeded 30,600.

The Philippines has so far fully immunised about 11per cent of its 110 million people against COVID-19, leaving millions still vulnerable.

(Reporting by Neil Jerome Morales and Karen Lema; Editing by Ed Davies, Martin Petty)

Source: Reuters

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