AMRO projects Philippine GDP growth at 6.4%

The ASEAN+3 Macroeconomic Research Office (AMRO) expects the Philippine economy to recover and post a 6.4% growth this year, but this is hinged largely on the rollout of the vaccination program against COVID-19.

In a virtual briefing on Tuesday, AMRO noted the importance of the country’s vaccination program in driving economic growth moving forward.

“Economic recovery will only be sustained through a quicker rollout of vaccinations, the implementation of targeted containment measures, as well and continued injection of stimulus,” it said in an accompanying statement.

The country started its vaccination program in March, with 70 million Filipinos needing to be inoculated to reach herd immunity. Its vaccination for the A4 category or economic frontliners started earlier this month.

With the latest developments, AMRO projects the Philippine gross domestic product (GDP) growth at 6.4% this year, and 6.8% in 2022, following the record-low -9.6% in 2020.

“However, the resurgence of infections since March has weakened the recovery momentum and significantly raised the downside risk to these baseline forecasts,” it said.

Following the surge in cases, the NCR Plus bubble —Metro Manila, Cavite, Laguna, Rizal, and Bulacan—was placed under the strictest enhanced community quarantine (ECQ) from March 29 to April 11, the modified ECQ from April 12 to May 14, and the general community quarantine

“Economic activity in the Philippines has started to pick up since Q2 2020, when restrictive measures were relaxed,” AMRO said.

“Since then, the economy has continued to gain momentum, but significant slack remains, as indicated by the high unemployment rate of 7.1% as of March 2021,” it added.

Latest data from the Philippine Statistics Authority (PSA) shows that jobless Filipinos stood at 4.14 million in April,  equivalent to an unemployment rate of 8.7%.

“A speedy and robust economic recovery is essential to absorbing displaced workers, but the economy can only improve if the COVID-19 pandemic is well contained, such that the economy can reopen fully and business confidence is restored” AMRO said.

“The government should therefore continue providing strong policy support,” it added.

The Philippines on Monday, June 28, reported 5,604 new confirmed cases of COVID-19, bringing the total to 1,403,588. This includes 5,604 active cases; 1,327,103 recoveries; and 24,456 deaths.

In the same briefing, AMRO said it expects inflation at 4.3% this year, higher than the government’s target range of 2% to 4%, before falling to 3.2% in 2022.

“The surge in prices is likely to persist for some months, because the normalization of food supply will take time, while fuel prices will be boosted by the low base effect in early 2020,” it said.—AOL, GMA News