November 12, 2021

In Q4, PH showed normalized growth of at least 5.5 percent.

An analyst predicts a GDP of at least 5.5 percent in the fourth quarter, attributing the lower figure to growth normalization.

This comes as the Philippine economy outperformed expectations in the third quarter, expanding by 7.1 percent.

“Easing of low base/denominator effects would lead to a more normalized pace of GDP (gross domestic product) growth of at least +5.5 percent by 4Q (fourth quarter) 2021, for a full year GDP growth of about +5 percent or even higher for both, in view of further measures to reopen the economy with the adoption of smaller scale/granular lockdowns or Alert Level System nationwide possibly by December 2021,” says Michael Ang, chief economist of Rizal

In the first three quarters of this year, growth averaged 4.9 percent, above the government’s forecast of 4 to 5 percent growth for the year.

Further loosening of quarantine regulations, he added, would allow for more vigorous economic operations, which would result in higher output for the home economy, thanks to an enhanced vaccination program against the coronavirus disease 2019 (Covid-19).

“Any additional measures to reopen the economy justified by increased population vaccination and ultimately herd immunity would be the more sustainable source of better economic recovery prospects in terms of allowing greater capacity for businesses/industries that entail more investments and employment,” he said.

Other “green shoots” for the economy mentioned by Ricafort include the resilient remittances of overseas Filipino workers (OFWs), persistent growth of both exports and imports, manufacturing sector revival, foreign direct investments (FDIs), and government infrastructure spending.

“Given the country’s favorable demographics, with a population of over 110 million people, making it the world’s 12th most populous country, and a population growth rate of roughly +1.5 percent per year, it would fundamentally contribute to the country’s GDP growth,” he added.

Risk concerns, according to Ricafort, include high domestic inflation, which stifles a higher increase in household spending, and more contagious Covid-19 variations, which could lead to tighter movement restrictions and halt job growth.

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