NextGen Day

The Philippine economy grew by 7.7% in the fourth quarter of 2021, as loosening mobility restrictions boosted consumer spending and corporate activity, bringing full-year growth to 5.6 percent and raising hopes for a quick recovery this year.

“The country’s expansion in 2021 was substantially quicker than most analyst expectations, putting it among the fastest in the area. “Despite the impact of Typhoon Odette, this is a strong indication that we are on pace to speedy recovery,” Socioeconomic Planning Secretary Karl Kendrick Chua said in a press briefing Thursday, reading a joint statement from the government’s economic managers.

Chua cited Bloomberg data to claim that Singapore’s GDP grew by 7.5 percent last year, Vietnam’s by 2.6 percent, while the rest of the Association of Southeast Asian Nations (ASEAN) estimated growth ranged from 1% to 4%.

The full-year GDP growth of 5.6 percent in 2021 surpasses the Development Budget Coordination Committee’s target of 5.0 to 5.5 percent.

“We believe that by 2022, we will not only have recovered to pre-pandemic levels but will also have achieved upper-middle-income country status.” Throughout the Duterte administration, we have implemented a number of game-changing changes, and we will not slow down in the coming months. “We will continue to undertake structural changes that will strengthen our growth prospects and make the country more robust to future crises,” he said.

He credited Congress with adopting the Retail Trade Liberalization Act and the Foreign Investments Act revisions.

Chua emphasized the importance of completing the economic liberalization reforms by completing the bicameral conference approval and passage of the Amendments to the Public Service Act before Congress adjourns in February.

“This historic legislation would allow foreign investment in important areas such as telecommunications and transportation, as long as the essential protections are in place. This would result in more meaningful job opportunities, increased innovation, reduced pricing, and higher quality goods and services for all Filipinos,” he added.

Despite the impact of Typhoon Odette, which lowered full-year growth by an estimated 0.05 percentage point, Chua, chief of the National Economic and Development Authority (NEDA), claimed the 7.7% GDP was accomplished in the last three months of last year.

“We are now in the process of preparing the Post-Disaster Needs Assessment and various regional recovery programs, which we intend to complete by the end of the month in order to speed up the recovery of these affected regions,” he said.

Economic managers are hopeful of surpassing pre-pandemic levels this year, according to Chua, citing last year’s robust economic performance.

“Well, by the end of 2021, we’ll be very near to pre-pandemic levels.” If you look at nominal levels, they are nearly identical; we are only a few hundred billion (pesos) short, so we will surpass it in 2022,” he added.

Meanwhile, Dennis Mapa, the Philippine Statistics Authority’s (PSA) chief, and National Statistician, stated the country’s nominal GDP for full-year 2021 was estimated at PHP19.387 trillion, up from PHP19.518 trillion in pre-pandemic 2019.

Despite the fact that the risk of coronavirus disease 2019 (Covid-19) increased at the start of 2022 as a result of the highly transmissible Omicron variant, Chua said the country has experienced fewer severe cases and deaths than the total number of cases due to an accelerated vaccination program and improvements in the healthcare system.

“I believe there is a window of opportunity for us to reduce the alert level in the coming weeks.” “As long as we go back to Alert Level 2 or lower by the end of this quarter, we’ll be on target for full-year growth,” he said.

According to the NEDA, moving the National Capital Region (NCR) Plus area from Alert Level 3 to Alert Level 2 is estimated to increase gross value added by PHP3 billion.

“Any undiscovered virus variants are our biggest risk(s) this year.” Aside from that, there aren’t any surprises. “Inflation (oil and food) are two other threats that we are aware of and managing,” Chua said.

He added the country’s current policies are addressing the potential inflation risk posed by global food price increases, including greater support for the rice sector through the rice competitiveness development fund.

“As you are aware, all tariffs collected are used to help the rice industry boost productivity, and as you can see from today’s report, the rice sector grew strongly even during this period.” “We’re working on a law to boost the productivity of the cattle, poultry, and dairy industries so that producers may improve their production while consumers benefit from cheaper pricing,” he continued.

According to Chua, the industry and services sectors expanded by 8.2 percent and 5.3 percent, respectively, for the whole year 2021, reflecting a substantial return from the previous year’s contractions.

He said the agriculture sector, on the other hand, had a minor drop of 0.3 percent as a result of ongoing issues such as African swine disease and severe typhoons.

Chua said that private consumption increased by 4.2 percent in 2018, a sharp contrast to the -7.9% growth in 2020.

“As a result of the eased quarantine rules and the faster vaccination program, consumer confidence is returning,” he stated.

Chua said investments grew by 19 percent in 2019, up from -34.4 percent in 2020, helped by a 37.4% increase in public construction as the government pushed on with the “Build, Build, Build” infrastructure program.

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