Despite the risk posed by the Omicron variant to the economy, Bangko Sentral ng Pilipinas Governor Benjamin Diokno is optimistic that the country would still hit its growth target of 7 to 9 percent this year because of stable fundamentals.
BANGKO Sentral ng Pilipinas (BSP) Governor Benjamin Diokno voiced optimism of reaching the projected growth of 7 to 9 percent this year despite the risk of the Omicron variant to the economy.
In a virtual meeting with the Management Association of the Philippines, Diokno said
“our position is that, despite the recent variant of the virus, we will hit our projected growth of 7-9 percent. So, the variant, as it turned out, is mild and less lethal.”
“We hope that the variant will be gone by the middle of February or March. So that gives us confidence that we will hit our growth target of 7-9 percent this year, and 6-7 percent for the next two years,” he added.
Like other countries, the Philippines is experiencing an Omicron-driven surge. Active cases rose by a record 34,021 to 237,387 on Thursday, based on data from the Department of Health.
After the holidays, the government imposed tighter restrictions to curb the infection spread. Metro Manila and provinces seeing the surge were placed under Alert Level 3 until Jan. 15. This means businesses had to reduce operations.
P3 billion losses
Economic managers earlier said the more restrictive Alert Level 3 in Metro Manila and nearby regions could cost P3 billion in losses to productivity contributions.
Government officials are keen on imposing granular lockdowns instead of total lockdowns that were implemented earlier.
Diokno is hopeful that because the Omicron is “mild and less lethal” and since it hit early in the year, its impact will not be long-lasting to the growth outlook.
“We hope that the variant will be gone by the middle of February or March. So that gives us confidence that we will hit our growth target of 7-9% this year, and 6-7% for the next two years,” Diokno said.
The last time the country saw an infection spike was in August, no thanks to the Delta variant. Despite this, the economy beat expectations as it grew by 7.1 percent in the third quarter, bringing full-year growth to 4.9 percent.
The Philippine economy contracted by a record 9.6% in 2020 due to having one of the world’s longest and strictest lockdown at the early stages of the pandemic.
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