MANILA, Philippines—President Rodrigo Duterte’s economic managers have expressed optimism that this year’s upgraded growth target will be achieved, especially as the fourth quarter benefits from holiday demand and further reopening of more productive sectors.
“The country’s economic performance has exceeded our expectations in 2021,” said Finance Secretary Carlos Dominguez III on Wednesday (Dec. 15).
He said year-to-date growth in September was 4.9 percent. “So there’s a greater likelihood that our full-year GDP growth will hit the revised target” of 5 to 5.5 percent, Dominguez said.
On Tuesday (Dec. 14), the Cabinet-level Development Budget Coordination Committee (DBCC) raised its 2021 GDP growth goal, from 4 to 5 percent previously.
At the start of the year, the DBCC targeted as high as 6.5 to 7.5 percent GDP expansion this year, but the pandemic-induced recession which spilled over to the first quarter of 2021 plus COVID outbreaks in March and August had tempered the outlook.
“If we hit 7-percent [fourth-quarter growth], we will hit 5.5 percent for the year,” Dominguez said, citing estimates of Finance Undersecretary Gil Beltran, the Department of Finance’s (DOF) chief economist.
Beltran told reporters that 7-percent GDP growth during the fourth quarter will be “doable.”
At the DBCC’s press briefing after its meeting last Tuesday, Socioeconomic Planning Secretary Karl Kendrick Chua also said GDP growth could hit 7 to 8 percent year-on-year in the current quarter due to “significantly much more economic activity,” especially amid the Christmas season.
“I hope we can do better, given what’s actually happening on the ground,” said Chua, who heads the state planning agency National Economic and Development Authority (Neda).
“The good news is, even as we increased the mobility, allowed children to go out, [and] piloted the reopening of schools, [COVID-19] cases and deaths all went down. That is a very good sign that we are on-track to achieving more,” Chua said.
Dominguez was even more confident of growth prospects for 2022.
“Backed by a stronger health care system and the massive rollout of the vaccination program, we will solidify our recovery by reopening the economy, with [a less-restrictive alert] level one in January 2022,” Dominguez said.
“At the same time, to avert long-term productivity losses and restore more employment, we will resume face-to-face schooling most likely in January 2022, increase public transport capacity for all types of transport to 100 percent, and relax restrictions,” the finance chief said.
“Next year, we are confident that we will reach our GDP growth target of 7 to 9 percent, as the numbers are now all in our favor. This growth target is higher than our pre-pandemic growth rate of an average of 6 percent,” he added.
The DBCC also expects a return to pre-pandemic output levels by early next year.
With the government shifting to treating COVID-19 as endemic, the Economic Development Cluster (EDC) had crafted a 10-point policy agenda encompassing changes in:
- Infection metrics
- Ramping up mass vaccination
- Improving health care capacity
- Reopening the economy and increasing mobility
- Returning to in-person classes in schools
- Enjoining domestic as well as international travel
- Fostering digital transformation
- Pushing for the proposed pandemic flexibility bill
- Preparing for medium-term pandemic resilience