The World Bank has upgraded its Philippine economic outlook for 2021, but flagged additional uncertainties due to the detection of new COVID-19 variants.
According to the World Bank’s Philippines Economic Update released Tuesday, it now expects the Philippine economy to grow at 5.3% this year, higher than the 4.3% outlook in September.
“The growth project for 2021 has improved in light of better-than-expected Q3 numbers,” the ‘Regaining Lost Ground, Revitalizing the Filipino Workforce’ report said.
The Philippine economy grew by 7.1% in the third quarter, faster than the World Bank’s projection of 4.8%. This follows the 12% growth recorded in the second quarter.
The highly transmissible Delta variant recorded its highest seven-day average in September, which led to the reimposition of quarantine restrictions in key areas in metropolitan areas.
The World Bank noted, however, that the economic impact of the pandemic is likely to be less severe, as the government implements its policy of phased economic reopening.
“The new variant has added a layer of uncertainty but economic reopening, along with progress in vaccination, is clearly strengthening domestic dynamism and market confidence,” World Bank Philippines Country Director Ndiame Diop said.
“As the recovery gains traction, it will be important to enhance private sector participation in the recovery by deepening current efforts to make the country’s business environment favorable to job creation while upskilling the workers so that they can benefit from new or emerging job opportunities,” he added.
Malacañang last month announced the temporary suspension of the implementation of a resolution allowing the entry of fully vaccinated foreigners with visa-free privileges due to concerns involving the spread of the Omicron variant of COVID-19.
The World Health Organization (WHO) has designated Omicron as a variant of concern, and many countries are racing to try and contain it. The origin of the variant is currently unclear, but South African scientists were the first to announce the discovery on November 25.
The Philippines has so far placed several countries under the Red List until December 15, in efforts to prevent the spread of the variant.
For next year and in 2023, the World Bank expects the Philippine economy to grow at 5.3%, along with the boost in the country’s vaccination efforts.
“Alongside the progress in vaccination, the phased economic reopening will support a return of market confidence and domestic dynamism,” the report stated.
“The reopening is expected to benefit the services sector especially transportation, domestic tourism, and wholesale and retail trade,” it added.
Latest data from the health department indicate that the Philippines has so far administered a total of 92,752,986 doses as of December 6, 2021. Some 38.699 million individuals have been fully vaccinated, 53.492 million with the first dose, and 561,125 have received booster shots.
Source: Worldbank