(Bloomberg) -- The Philippine government cut its economic outlook for the year as it struggles with a surge in coronavirus cases that threatens the recovery.

Gross domestic product is now tipped to grow 6% to 7% this year, down from a previous estimate of 6.5%-7.5%, according to the Development Budget Coordination Committee, which sets the government’s economic assumptions for budget purposes.

Tuesday’s downgrade comes after first-quarter GDP contracted more than expected, cementing the Philippines’ status as one of Asia’s laggards in terms of recovery. Stricter curbs since late March in the capital region and surrounding provinces, the country’s economic backbone, have shuttered businesses and destroyed jobs.

Economies across Southeast Asia are facing an uphill battle as fresh waves of Covid cases threaten recovery prospects. Tougher containment measures from Thailand to Singapore and a slow vaccine rollout continue to weigh on business and consumer confidence.

The peso climbed to its strongest level in more than four years in May, as movement restrictions curb demand for imports. The currency has risen more than 1% in the past three months, among the top performers in Asia.

According to a survey of 33 economists conducted by Bloomberg News this month, the Philippine economy will expand 5.5% in 2021, 6.5% next year and 6.1% in 2023.

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