In the second quarter, the Philippines’ GDP grew at its fastest rate in almost three decades, reaching 11.8 percent
The Philippine economy rebounded to 11.8 percent in the second quarter of this year, owing to base effects and a “better balance” between treating the consequences of the coronavirus and the need to restore Filipino employment and wages.
The April to June economic growth rate increased from -17 percent in the same time the previous year, and it was the highest GDP since the fourth quarter of 1988.
“Despite the implementation of the ECQ (enhanced community quarantine) and the MECQ (modified enhanced community quarantine) in April and May 2021, almost all sectors recovered. This is a clear indication that risk management, rather than shutting down large segments of the economy, has a far better chance of improving both economic and health outcomes,” Socioeconomic Planning Secretary Karl Kendrick Chua said in a virtual press conference Tuesday, reading a joint statement from the government’s economic managers.
Unlike last year’s ECQ, when 75 percent of the economy was shut down, Chua said most industries and services continued to function, public transit remained accessible, and employees were excused from the curfew during the second quarter ECQ.
To combat the spread of coronavirus illness 2019, the National Capital Region (NCR) and the provinces of Bulacan, Rizal, Laguna, and Cavite were put under the tightest quarantine mode from March 29 to April 11. (Covid-19).
“With the rise in economic activity, more Filipinos have been able to reclaim their employment and income. According to the most current labor force survey data for June 2021, the economy added 2.5 million jobs above the pre-pandemic level, and the quality of employment has improved due to the much-reduced underemployment rate,” he stated.
The Development Budget Coordination Committee (DBCC), according to Chua of the National Economic and Development Authority (NEDA), would examine current economic statistics and the risks associated with the Delta variant to fine-tune growth goals and modify recovery plans.
“…With the second-quarter results, they will assist us in meeting our year-end goal. However, it is also contingent on the results of the current ECQ. We will be able to remove the ECQ sooner if we are able to control the risk and everyone cooperates and follows the health protocol. On the other side, if we do not comply, the ECQ may be extended. We will make the most of this time to immunize as many people as possible, paving the groundwork for a safe reopening of the economy and reducing risk in the second half of 2021,” he added.
He said that approximately 148 million doses of the vaccine are expected to arrive throughout the rest of 2021, with the goal of inoculating 70 million Filipinos, or the entire adult population, by year’s end.
According to Chua, the seasonally adjusted quarter-on-quarter economic growth might have been worse if the government had not properly controlled risks, permitted most industries to function, and enforced health standards.
From August 6 to 20, Metro Manila will be under ECQ to prevent the spread of the highly virulent Delta coronavirus strain.
“In 2021, the prospects for a robust economic rebound remain bright. Although there are speed bumps in Metro Manila and other areas of the nation due to the present ECQ, we are now better prepared to maintain ongoing positive growth,” he said.
The DBCC has maintained its growth goals of 6% to 7% this year and 7% to 9% in 2022.
In the same briefing, National Statistician Dennis Mapa said that, based on the Philippine Statistics Authority’s (PSA) calculations, the economy should grow by 8.2 percent in the second half of 2021 to meet the lower end of the year’s 6 percent target, and then accelerate by 10.2 percent to reach 7%.
According to Mapa, the greatest GDP growth was achieved in the fourth quarter of 1988, at 12 percent, followed by 8.1 percent and 8% in the first and second quarters of 2010, respectively.
Meanwhile, Chua said that all sectors grew in the second quarter, with the exception of agriculture, which shrank by 0.1 percent due to lower pork output.
As the nation better handled the Covid-19 dangers and reduced quarantine limitations, the industrial sector expanded by 20.8 percent, while services grew by 9.6 percent, he added.
On the spending side, Chua reported a 75.5 percent increase in overall investment, with private investment almost tripling at 94.9 percent, indicating improved business confidence.
According to him, both public and private construction increased between April and June, resulting in a 25.7 percent increase in the construction industry overall.
“Our strategy of allowing both public and private building during the (ECQ) period last March and April 2021 demonstrates that we can restore the economy while reducing Covid-19 infections,” he said.
Chua added that when consumer confidence improved, household spending growth increased to 7.2 percent in the first half of 2021, as millions of people recovered employment and income sources.
He went on to say that government spending fell by 4.9 percent in the second quarter of 2020, owing to the significant base impact from the roll-out of the largest-ever emergency subsidies.