Philippine Economy: Officials Forecast Strong 2021 Based On Latest Quarterly Report

By Marielle Lucenio

The Philippine economy grew by 11.8 percent from April through June compared with the same period in 2020, and ahead of a potential recovery in 2021 despite a coronavirus lockdown now in effect in Metro Manila, government planners said Tuesday.

The planners attributed the growth to the government striking a balance between confronting the COVID-19 pandemic while ensuring jobs and incomes. The second quarterly figure marked a turnaround from a 17 percent contraction in the same period last year. It was also the highest gross domestic product (GDP) growth since 1988, according to government figures. 

“Prospects for a strong economic recovery in 2021 remain promising. Although there are speed bumps given the current ECQ [enhanced community quarantine] in Metro Manila and other parts of the country, we are now better equipped to sustain continuous positive growth,” Socioeconomic Planning Secretary Karl Chua said.

He was referring to a two-week hard COVID-19 lockdown currently in force in the capital region.

“Our policy to allow both public and private construction even during the enhanced community quarantine period last March and April 2021 shows that we can revive the economy while addressing COVID-19 infections,” he said as he read a joint statement from the government’s economic team. 

The Philippine Statistics Authority, on the other hand, said more recent comparisons painted a different economic picture.

“On a seasonally adjusted basis, GDP posted negative quarter-on-quarter growth rate of minus-1.3 percent,” National Statistician Dennis Mapa tweeted, adding, “GNI [Gross National Income] recorded 1.5 percent quarter-on-quarter growth rate in the second quarter of 2021.”

Praising the year-to-year numbers, Chua said that while many sectors opened up tentatively, there were also upticks in private investments. These indicated “improvements in business confidence as the economy learns to live with the virus,” he said.

“In summary, almost all sectors bounced back despite the imposition of the ECQ and the MECQ [modified enhanced community quarantine] last April and May 2021,” Chua said.

“This is a clear indication that managing risks, instead of shutting down large segments of the economy, stands a far better chance of improving both economic and health outcomes,” he said.

Despite Chua’s outlook, the chairwoman of the Senate Committee on Public Services noted that the report’s findings needed to be compared with the period before COVID-19.

“Economic growth may be at its highest since 1988, but let’s not lose sight of the fact that it still isn’t back to pre-pandemic levels,” Sen. Grace Poe said in a statement. “We may have grown by 11.8 percent from the 17 percent contraction of last year, but that’s nothing to brag about because much of it is base effect.”

She called on the government to use tax revenues to pay hospitals and health-care workers while protecting and creating jobs.

“Let’s keep our people safe and ensure that there will be food on their table. Then and only then can these growth numbers mean anything,” Poe said.

COVID-19

Unlike last year, when 75 percent of the economy ground to a halt while lockdowns were imposed because of the pandemic, some industries and services have been allowed to keep operating this year in limited capacities, the economic team members said. 

“Our COVID-19 vaccination program is on track. We have been receiving a steady supply of vaccines from multiple sources,” they said, noting that as of Tuesday, more than 38 million doses of vaccines have arrived in the Philippines. “For the remainder of 2021, we are expecting the arrival of over 148 million doses of the vaccine.” 

The country’s economic recovery depends on accelerated inoculations, the economic team said.

To date, 11.3 million Filipinos have been fully vaccinated, with another 13 million having received their first dose, according to the government statistics. The Philippines aims to vaccinate 70 percent of its 110 million people this year. 

Authorities placed Metropolitan Manila and other communities under a hard lockdown on Aug. 6 while warning that the Delta strain of COVID-19 was spreading.

The lockdown allows only essential business and sectors such as hospitals and supermarkets to remain fully operational. 

“We encourage everyone to use this ECQ period to get vaccinated, so we can safely reopen the economy once we have contained the spread of the Delta variant,” Chua said.