World Bank lifts Philippines growth forecast despite Delta curbs

The World Bank raised its growth forecast for the Philippines to 5.3 per cent from a 4.3 per cent estimate in September, despite stringent curbs to contain a Delta-variant-driven surge in COVID 19 cases, as the Philippine economy is likely to grow faster than previously thought this year, with momentum expected to pick up further next year.

Kevin Chua, World Bank Senior Economist, told a media briefing that the Philippines is on the path to economic recovery from a deep economic contraction last year.

The economy contracted by a record 9.6 per cent last year as Pandemic-induced lockdowns shuttered businesses and crimped household consumption, which is a key driver of growth.

The Philippines, which was one of Asia's fastest-growing economies before the Pandemic, is expected to expand further to 5.9 per cent next year. Growth in 2023 is expected to be 5.7 per cent.

The outlook should be underpinned by progress administering vaccines, allowing for a wider economic reopening, the World Bank said, even as it warned about the risks posed by a new wave of infections.

Ndiame Diop, World Bank Country Director for Brunei, Malaysia, Philippines and Thailand, said the uncertainty surrounding the epidemic still weighs heavily on market sentiment and investment decisions.

The Philippines, which has recorded 2.84 million COVID 19 cases and 49,499 deaths in total, is one of the countries worst hit by COVID 19 in Asia. The restrictions have been eased further because of the new cases that have come off a peak.

The unemployment rate fell to 7.4 per cent in October compared to 8.9 per cent in September, with the lifting of curbs allowing more businesses to open and people to go back to work, according to government data.

As of December 2, around 34 per cent of the Philippines' 110 million people had been fully immunised.