MANILA (Reuters) -The Philippines on Tuesday upgraded its economic growth target for 2021 and said it was in better shape to handle a possible resurgence in COVID-19 cases as it plans to further reopen the economy by the start of 2022.
Gross domestic product (GDP) is expected to expand by 5.0% to 5.5% this year, up from a previous estimate of 4.0% to 5.0%, the government’s Development Budget Coordination Committee (DBCC) said after reviewing the 2021-2024 macroeconomic assumptions, fiscal programme, and growth targets.
The government retained its GDP growth targets at 7.0%-9.0% for 2022 and 6.0%-7.0% for both 2023 and 2024.
An accelerated vaccination drive has enabled the safe and targeted reopening of the economy, with growth likely to return to pre-pandemic levels by 2022, the DBCC, which is composed of the country’s top economic officials, said in a statement.
“While the threat of new COVID-19 variants may persist in the short-term, we are now in a much stronger position to manage possible spikes in cases and safely reopen the economy,” it said.
To hit the revised GDP growth estimate for this year, the fourth-quarter expansion should hit 7%-8%, Economic Planning Secretary Karl Chua said in a media briefing.
The projections for inflation, foreign trade, and the foreign exchange rate for 2022 to 2024 were maintained given recent economic developments, they said.
On the fiscal front, they said the budget deficit this year was estimated at 8.2% of GDP, taking into account higher-than-target revenues and lower-than-programmed disbursements.
As the government pursues a fiscal consolidation strategy, they said the deficits for the next three years were projected to be on a downward trajectory: 7.7% of GDP for 2022, 6.1% of GDP for 2023, and 5.1% of GDP for 2024.
(Reporting by Neil Jerome Morales and Enrico dela Cruz; Editing by Martin Petty and Ed Davies)
