MANILA: The World Bank has slashed its Philippine growth projection for this year due to a deeper-than-expected contraction in the first quarter and the reimposition of stricter quarantine measures in the capital region to contain a surge in COVID-19 cases.
While growth in the Philippines remains on track for recovery, the bounce back this year will likely be lower than previously expected at 4.7per cent, Kevin Chua, World Bank senior economist, told a media briefing.
The World Bank's forecast was cut from its previous projection of 5.5per cent and compares with the Philippine government's 2021 growth target of 6.0per cent-7.0per cent.
The economy contracted by a record 9.6per cent last year.
Chua flagged a host of "significant downside risks" to the World Bank's outlook, including the resurgence of infections due to new COVID-19 variants and extended mobility restrictions.
The Southeast Asian country is battling one of Asia's worst coronavirus outbreaks with more than 1.27 million cases recorded and nearly 22,000 deaths.
A new surge in cases starting in March had prompted the reimposition of stricter mobility curbs in the capital region and nearby provinces, but new cases have come off a peak, allowing for some restrictions to be eased.
Philippine authorities are banking on a steadier flow of vaccine deliveries in the second half to ramp up its immunisation drive to allow a further reopening of the economy and more people to return to work.
The unemployment rate climbed to 8.7per cent in April, equivalent to more than 4 million jobless people, from 7.1per cent in March, government data showed.
The World Bank also lowered its growth forecast for the Philippines for next year and in 2023 to 5.9per cent and 6.0per cent, respectively, from the 6.3per cent and 6.2per cent estimates it announced in March.
"The key policy challenges are to manage the pandemic, effectively deliver social protection and mobilise sector participation in the recovery," Chua said.
(Reporting by Karen Lema; Editing by Ed Davies)