MANILA, Philippines — The International Monetary Fund (IMF) expects a shallower recovery for the Philippines in the second half due to the resurgence of COVID cases.
Malhar Nabar, head of the World Economic Studies Division at IMF, told participants at the press briefing during the recently concluded Annual Meetings of the World Bank Group and IMF in Washington that the Philippines is on the way to recovery from the pandemic-induced recession.
“We also expect a shallower recovery in the second half of this year because of renewed concerns about caseloads and the spread of the pandemic,” Nabar said.
The multilateral lender slashed its gross domestic product (GDP) growth forecasts for the Philippines to 3.2 percent this year and to 6.3 percent next year.
“The Philippines is coming out of a very steep contraction last year. The recovery is underway. We expect the economy to grow 3.2 percent this year, but we have downgraded the projection for this year because of developments in the second quarter where the pandemic took a turn for the worse and caseloads went up,” Nabar said.
The IMF stressed the need to accelerate the COVID vaccine rollout to pave the way for a stronger recovery.
“But going forward into 2022, we think with the continued vaccine rollout, continued policy support, this should support a continued recovery in the Philippines’ economy, and we project a growth at about six percent in 2022, also supported by improvements in trading-partner growth,” Nabar said.
The Philippines slipped into recession as the GDP shrank by a record 9.6 percent last year.
“The Philippines is another country that was hit hard by the second wave, but at the same time, they have had additional supplementary budgets that they rolled out that helped in terms of the recovery,” IMF chief economist Gita Gopinath said.
The Philippines exited the pandemic-induced recession with a strong GDP growth of 11.8 percent in the second quarter, a reversal of the 3.9 percent contraction in the first quarter.
However, economic managers through the Development Budget Coordination Committee (DBCC) lowered this year’s GDP growth anew in August to a range of four to five percent instead of six to seven percent.
Finance Secretary Carlos Domiguez, Socioeconomic Planning Secretary Karl Chua and Bangko Sentral ng Pilipinas Governor Benjamin Diokno are confident that this year’s target can be achieved.