Moody's downgrades PH economic growth forecast

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Metro Manila (CNN Philippines, July 21) — Moody's Investors Service lowered its forecast for the Philippine economy's growth this year amid uncertainties brought by the COVID-19 pandemic.

In its latest research note, Moody's downgraded its gross domestic product projection for the country to 5.8% from 7% in January, saying "the degree and pace of recovery are subject to uncertainties related to the coronavirus pandemic, as well as the progress on vaccination."

The credit rating agency added that recent containment measures - like the implementation of enhanced community quarantine in March - "although more lenient than the severe lockdowns imposed in 2020 will threaten our expectation of a sharp rebound in real GDP growth in 2021."

Its latest projection is also lower than the government's target of 6% to 7%.

On the flipside, Moody's is expecting recovery to restore rapid economic growth relative to the country's peers despite large contraction last year. It noted that improved consumer spending and investments, as well as fiscal aid, are factors that will support the growth this year.

For 2022, the agency sees a 6.5% growth - still below the government's 7% to 9% target.

CNN Philippines has reached out to Socioeconomic Planning Secretary Karl Chua - one of the administration's economic managers - for comment regarding the matter.

The country has so far recorded 1,524,449 COVID-19 infections, which include 47,996 active cases or people currently sick. Recoveries stood at 1,449,579 while the death toll is at 26,874.

Amid threats posed by the more contagious Delta variant, the government is making efforts to step its vaccination program, with the distribution of over 20 million coronavirus shots from around 27 million doses that arrived as of July 17.

More than 15 million shots have been administered across the country - with some 5 million Filipinos already receiving two doses.

By the end of 2021, the government aims to immunize up to 60% of the target population, with more focus on Metro Manila, to reach immediate protection.