Q2 GDP growth is expected to be “very strong,” according to the Department of Finance’s top economist.
According to Finance Secretary Carlos Dominguez III, the country’s second-quarter economic growth would be “very excellent” as the job situation improves.
Dominguez refused to offer precise numbers in an interview with Bloomberg TV on Wednesday, saying he is “not big on forecasts,” but citing a decrease in unemployment and underemployment in May.
“The fact that we’ve added approximately 2.5 million new jobs in the past year seems to be excellent news for us,” he remarked.
According to the Philippine Statistics Authority (PSA), the labor force participation rate increased to 64.6 percent in May from 63.2 percent the previous month.
In May, the employment rate rose to 92.3 percent, up from 91.3 percent in April, while the underemployment rate fell to 12.3 percent from 17.2 percent.
As a result, the unemployment rate fell to 7.7% from 8.7%.
The rise in employment rate has been ascribed to the economy’s continuous reopening, which enables more people to find work.
On August 10, the second-quarter gross domestic product (GDP) data will be published.
The country’s GDP contracted by 4.2 percent in the first three months of 2021, which was better than the -8.3 percent decline in the previous quarter.
The growth goal set by economic managers for this year is between 6 and 7 percent, with 7 to 9 percent for next year and 6 to 7 percent for 2023-2024.
With the epidemic likely to persist, Dominguez stressed the need of being “fiscally prudent.”
“We want to make sure we have adequate resources to deal with any issues that arise in the future, such as pandemic outbreaks. We also want to ensure that we have the funds to safeguard our people, which includes providing them with enough vaccines,” he said.
Dominguez said that the government’s USD3-trillion borrowing program for this year will be mainly sourced domestically at approximately 75%, as it was last year.
He added the remainder will be accessed abroad “depending on the market scenario.”
“We’re keeping our options open for local and foreign funding. And it’ll basically be the same amount,” he said.
To date, the government has issued dual-tranche, 10.5-year and 25-year US dollar-denominated bonds worth PHP150 billion (USD3 billion); EUR2.1 billion multi-tranche, 4-year, 12-year, and 20-year global bonds worth EUR2.1 billion; and JPY55 billion three-year zero-coupon fixed-rate yen-denominated Samurai bonds worth JPY55 billion.
These borrowings, according to Dominguez, would assist fund government initiatives this year, including the purchase of coronavirus vaccinations (Covid-19).
As of July 21, over 30 million vaccine doses have arrived in the nation, with roughly 70 million doses anticipated in the third quarter and around 55 million doses expected in the fourth quarter, according to him.
He said that the vaccine campaign is the government’s main way of combating the infection.