DBCC lowers PHL GDP growth target for 2021 to 6-7%

The Development Budget Coordination Committee (DBCC) has lowered the Philippines' GDP growth target for 2021 from 6.5-7.5 percent to 6-7 percent due to stricter enhanced community quarantine (ECQ) in the NCR Plus bubble and the rise of COVID-19 variants.

Economic managers expect economic growth to improve to 7-9 percent in 2022, a slight decrease from the previous target of 8-10 percent, before returning to pre-pandemic levels of 6-7 percent in 2023 and 2024.

The country's GDP contracted by 4.2 percent in the first quarter of 2021, an improvement from the previous quarter but still weaker than the first quarter of 2020.

The revised growth targets consider the first-quarter domestic output and are supported by interventions such as intensified PDITR strategy, full vaccination in high-risk areas, and improved contact tracing.

A proposed PHP170 billion in supplementary social protection financing and improved health protocols are also expected to aid economic recovery.

The government increased its spending program for 2021 to PHP4.74 trillion, with further increases projected for the following years.

The inflation target remains at 2-4 percent until 2024.

The DBCC maintained projections for the peso-dollar exchange rate at PHP48-53 and the 364-day T-bill rate between 2-3 percent for 2021.