Dominguez: PH economy to boom after the pandemic

Finance Secretary Carlos G. Dominguez III. Photo courtesy of DOF

MANILA, Philippines—Not even next year’s presidential elections and the forthcoming change in administration would stop the Philippines from booming post-pandemic, with its young population expected to move the economy forward, Finance Secretary Carlos Dominguez III said.

“We have a long history of continuity in the economic field, from the time of Cory Aquino in the mid-1980s” up to the Duterte administration, Dominguez told CNBC in an interview last Monday (Dec. 13). He was agriculture secretary of the Cory Aquino administration.

A number of think tanks had already flagged political risks which could spill over to economic prospects with the May 2022 elections fast approaching.

“Our financial and economic policies have been very, very stable,” said Dominguez.

“Of course, different administrations have different emphasis, and, of course, have different political capital and political will. But essentially, the economic policies have been very stable,” Dominguez said.

As President Rodrigo Duterte’s chief economic manager, Dominguez already offered to help the incoming administration in its transition to power.

He said he wanted the current economic team to brief their successors about the future’s prospects and challenges—Dominguez had pointed to outgrowing debt, high global inflation, wider income inequality locally and worldwide, plus climate change among the issues which the next president needed to address.

Asked what would make the Philippines more appealing to foreign investors compared to its neighbors, Dominguez replied: “We have a very robust economy. We are enjoying our demographic sweet spot.”

“Our average age here right now is 25, and we are very well-educated. In fact, Filipinos are in demand across the world,” he added.

Dominguez also noted that the Philippine economy grew by an average of 6.6 percent yearly pre-pandemic. However, gross domestic product (GDP) shrank by a record 9.6 percent in 2020 — the worst annual recession post-war — as a result of the then longest and most stringent COVID-19 lockdown in the region. This year, the government expects a return to GDP growth of 4 to 5 percent as the economy emerges from strict quarantine restrictions.

For Dominguez, the Philippines was “a very good place to invest.”
“As soon as we overcome the COVID-19 contagion, I believe our economy is going to boom,” he said.

The government targets 7 to 9 percent GDP expansion next year and 6 to 7 percent yearly in 2023 and 2024 — a return to pre-pandemic growth rates in the short to medium term.

However, economists had flagged long-term scarring effects on the economy of the pandemic-induced recession, prolonged closure of in-person classes in schools, plus the return to poverty of vulnerable sectors.

TSB