A survey conducted by the Bangko Sentral ng Pilipinas (BSP) said most banks expect the Philippines’ gross domestic product (GDP) to grow only 5 to 6 percent this year and next year, citing concerns about the impact of the coronavirus disease 2019 (Covid-19) pandemic on the economy.

“Banks report subdued optimism on the country’s economic prospects due to uncertainties brought about by the resurgence of Covid-19 cases, reimposition of targeted lockdown measures and delay in the vaccination rollout in the first quarter of 2021,” the central bank said in its latest Banking Sector Outlook Survey (BSOS) released on Wednesday.

About 41.9 percent of respondents estimate GDP growth to range between 5 percent and 6 percent over the next two years in the first half of 2021. Meanwhile, 20.9 percent of survey respondents see GDP to grow between 6 percent and 6.3 percent.

Their forecasts compare with the government’s growth targets of 6-7 percent this year and 7-9 percent in 2022. It is, nevertheless, better than the 9.6 percent drop in 2020.

The BSP also said that, “Amid the banks’ subdued optimism on the country’s economic prospects, the overall outlook in the banking system remains stable.”

According to the Bangko Sentral, 76.3 percent of banks anticipate a stable Philippine banking system (PBS) in the next two years, which is higher than the overall estimate of 68.8 percent of industry leaders for the second semester of 2020.

Several institutions, however, have modified their positive outlook for a better banking sector, resulting in a rise. The central bank said 18.3 percent of respondents, primarily rural and cooperative banks, expect the banking industry to deteriorate in 2022-2023.

“Expectations of improvement in economic growth and stable outlook on the PBS influenced 60.0 percent of the respondents to project double-digit growth in bank assets,” it continued.

The BSP added, this is roughly comparable to the 60.5 percent of respondents who sees double-digit asset growth in the second semester of 2020 survey, but lower than the 70.7 percent projected for the second semester of 2019.