The Philippine economy expanded by 7.7 percent in the last quarter of 2021 as easing mobility restrictions perked up consumer spending and business activities, bringing full-year growth to 5.6 percent and boosting optimism about staging a rapid rebound this year.
“This (2021) growth performance was much faster than most analyst forecasts, making the country’s expansion among the highest in the region. This sends a strong signal that we are on track to rapid recovery despite the impact of typhoon Odette,” Socioeconomic Planning Secretary Karl Kendrick Chua said in a press briefing yesterday, reading a joint statement of the government’s economic managers.
Citing data from Bloomberg, Chua said Singapore’s economy grew by 7.5 percent last year, Vietnam’s by 2.6 percent, while that of the rest of Association of Southeast Asian Nations (Asean) estimates were from 1 percent to 4 percent.
Full-year 2021 gross domestic product (GDP) growth of 5.6 percent exceeds the Development Budget Coordination Committee’s target of 5.0 to 5.5 percent.
“We are optimistic that we will not only recover to the pre-pandemic level in 2022, but achieve the upper-middle income country status. We have put in place several game-changing reforms throughout the Duterte administration, and we will not slow down in these final months. We will continue to pursue structural reforms that will make the country more resilient against future crises and solidify our growth prospects,” he said.
He cited Congress for passing the amendments to the Retail Trade Liberalization Act and the Foreign Investments Act.
To complete the economic liberalization reforms, Chua reiterated the urgent need to finalize the bicameral conference approval and passage of the Amendments to the Public Service Act before Congress adjourns this February.
“This landmark legislation will open up key sectors, including telecommunications and transportation, to foreign investments subject to the necessary safeguards. By doing this, it will create more meaningful employment opportunities, enhance innovation, lower prices, and improve the quality of goods and services for all Filipinos,” he added.
Chua, chief of the National Economic and Development Authority (NEDA), said the 7.7 percent gross domestic product (GDP) was achieved in the last three months of last year despite the impact of Typhoon Odette which reduced full-year growth by an estimated 0.05 percentage points.
“We are now in the stage where we are preparing the Post-Disaster Needs Assessment and various regional recovery programs which we hope to complete by the end of the month so that we can accelerate the recovery of these affected regions,” he said.
Chua said with the strong economic performance last year, economic managers are confident of surpassing the pre-pandemic levels this year.
“Well, we are very close to the pre-pandemic level at the end of 2021. If you look at the nominal levels, it is almost the same, we are just I think a few hundred billion (pesos) short so we are going to surpass it in 2022,” he added.
Meanwhile, Philippine Statistics Authority (PSA) chief and National Statistician Dennis Mapa said the country’s nominal GDP for full-year 2021 was estimated at PHP19.387 trillion compared to pre-pandemic 2019 level of PHP19.518 trillion.
Chua said although COVID-19 risks increased at the start of 2022 due to the highly transmissible Omicron variant, the country has limited severe cases and deaths relative to the total number of cases due to the accelerated vaccination program and improvements in the healthcare system.
“So, I think there is an opening for us to lower the alert level in the coming weeks. We are still on track for our full-year growth so long as we fully go back to Alert Level 2 or lower by the end of this quarter,” he said.
The NEDA chief said shifting from Alert Level 3 to Alert Level 2 the National Capital Region (NCR) Plus area is expected to boost gross-value added by PHP3 billion.
“Our main risk(s) this year are any unknown variant of the virus. Other than that, there are no surprises. Other risks that we are aware of and addressing are inflation (oil and food),” Chua said.
He said the country is addressing the possible inflation risk from the global increase in food prices with current reforms, including providing more support to the rice sector through the rice competitiveness enhancement fund.
“As you know, all the tariffs that are collected are provided to support the sector to improve productivity and as you have seen in the report today, the rice sector grew strongly even during this period. We are working on a bill to improve the productivity of the livestock, poultry and dairy sector so that the farmers are supported to improve their productivity while the consumers are supported with lower prices,” he added.
Chua said for the full-year 2021, the industry and services sectors grew by 8.2 percent and 5.3 percent, respectively, representing a strong rebound from the contractions experienced by these sectors the previous year.
He said the agriculture sector, however, experienced a slight decline of 0.3 percent amid the challenges the sector continued to face, including the African swine fever and super typhoons.
On the expenditure side, Chua said private consumption grew by 4.2 percent, a stark reversal from 2020’s -7.9 percent.
“This indicates returning consumer confidence as a result of relaxed quarantine restrictions and the accelerated vaccination program,” he said.
Chua said investments recorded a robust growth of 19 percent rebounding from -34.4 percent in 2020, supported by a 37.4-percent growth in public construction as the government proceeded full-steam ahead with the implementation of the “Build, Build, Build” infrastructure program.*PNA