The 5-6% GDP projection for 2021 is “increasingly attainable,” according to Solon.
As the country’s economy reopens and economic prospects improve, the chairman of the House Ways and Means Committee said on Tuesday that the economic managers’ growth objective of 5 to 6% of real gross domestic product (GDP) for 2021 is “becoming increasingly realistic.”
Rep. Joey Salceda of Albay cited decreased aggregate Covid-19 levels, expedited immunization, and workplace modifications as indicators that the economy is on the mend.
“GDP growth in the second quarter was 12 percent, followed by 7.1 percent increase in the third quarter. “If nothing goes spectacularly wrong in the final quarter, I am confident that we will meet our yearly growth targets for this year,” Salceda said. “Our darkest concerns of stagflation have most likely passed us by. It appears that we will not remain stagnant in 2022 and 2023.”
He did warn, though, that as the economy improves, prices tend to rise.
“This could be an issue because job and salary recovery tends to lag behind actual growth.” In the meantime, prices will suffocate low-income families,” he stated.
He expressed confidence in the monetary policy tools available to combat inflation, but supply concerns could stymie price stabilization.
He urged the Departments of Agriculture, Transportation, Public Works and Highways, and the Interior and Local Government to guarantee that ports, expressways, airports, and other supply conduits are not clogged as demand rises.
To anticipate and minimize supply bottlenecks, he proposed forming a Task Force Supply Chain Management with the Department of Trade and Industry.
Annual inflation is expected to be 4.3 percent in 2021, according to the Bangko Sentral ng Pilipinas.
Given the rapid increase in demand that is unlikely to be met by proportional supply adjustments, Salceda cautioned that December inflation might be “far over the annual norm.”
He proposed a five-point plan to keep inflation from rising in the final month, including securing and decongesting ports, airports, expressways, and other major thoroughfares, as well as expanding efforts to facilitate markets for farmers who are expected to harvest their crops this month and avoid spoilage.
Other tactics in the strategy include speeding up the processing of documents for food imports, increasing consumer protection and pricing monitoring, and cutting the cost of raw items like oil.
“Congress is already working on a six-month postponement of the fuel excise tax.” Thankfully, crude prices are beginning to level out in other parts of the world. The road to recovery is beginning to open up. Inflation will be the next adversary, according to Salceda.