GAINS made in the first quarter could be wiped out by the rising COVID-19 case count, further setting back the economic recovery, the Department of Finance (DoF) said.

In an economic bulletin Sunday, the DoF said a prolonged lockdown is possible if the ongoing surge in coronavirus disease 2019 (COVID-19) cases is not contained. Such draconian measures, however, would prevent the economy from sustaining its recovery momentum.

The economic recovery is not expected to pick up momentum if lockdowns are extended, the DoF said.

“The spread of the virus has to be contained and its risks managed, through pharmaceutical and non-pharmaceutical interventions alike. Otherwise, draconian measures will be implemented again and the incipient recovery be, so to speak, nipped in the bud,” the DoF said.

Metro Manila and the nearby provinces Bulacan, Cavite, Laguna and Rizal, were placed under a hard lockdown for two weeks until April 11. Lockdown restrictions were eased slightly after that date, but businesses were still restricted until April 30.

The government is set to announce new quarantine measures for May within the week.

Daily cases remain elevated. The Health department reported 9,661 new cases on Saturday, bringing the total to 989,380.

Deaths have totaled 16,674 after 145 new fatalities were recorded.

The DoF said the first quarter gains manifested in the rebound in international trade and a pick-up in manufacturing activity.

Goods imports rose 2.7% to $7.60 billion in February after a 12% year-on-year decline in January, the Philippine Statistics Authority said. This marked the first rise after 22 months of declines in the indicator.

Meanwhile, factory activity in March, as measured through the Philippine Manufacturing Purchasing Managers’ Index (PMI), remained above the neutral 50-point mark, which separates growth from contraction. The PMI declined to 52.2 last month from 52.5 in February, but marked a third month of expansion.

“The rebound in merchandise trade and indicators of expansion in manufacturing activities signify that the green shoots of economic recovery are growing, albeit precariously given downside risks posed by the SARS-CoV-2 virus and the uncertainties of its variants,” it added.

Economists have since lowered their gross domestic product forecasts for the Philippines this year. Capital Economics reduced its growth projection for 2021 to 7.5% last week, from 8% previously. — Beatrice M. Laforga