The economy is still well-placed to grow within target this year as the Omicron variant is expected to be a risk to the economic outlook in the short term, according to Bangko Sentral ng Pilipinas (BSP) Governor Benjamin E. Diokno.
“Our position is that, despite the recent variant of the virus, we will hit our projected growth of 7-9%. So the variant, as it turned out, is mild and less lethal,” Mr. Diokno said at the 2022 virtual inaugural meeting of the Management Association of the Philippines.
“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,” 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 their operations.
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.
Mr. 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,” Mr. 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% in the third quarter, bringing full-year growth to 4.9%.
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.