With election fever on and as agencies fast-track projects ahead of the spending ban during campaign season for the 2022 polls, economists watching the Philippines have turned more bullish and jacked up their growth forecasts for this year and next year.
For its part, the Department of Finance (DOF) on Monday said sustained mass vaccination, reopening of more productive sectors from pandemic restrictions, and further opening of the economy to foreign investors would be key to bringing the Philippines’ annual gross domestic product (GDP) growth back to the “stellar” prepandemic average of above 6 percent.
The results of think tank Japan Center for Economic Research’s (JCER) latest quarterly consensus survey on Asian economies released also on Monday showed the average 2021 GDP growth projection for the Philippines rose to 5.1 percent from 4.3 percent previously. The government now targets a faster 5 to 5.5 percent economic growth for this year.
Upward revision
For 2022, economists projected GDP growth of 7.1 percent, up from 6.6 percent previously and within the government’s 7 to 9 percent goal for next year.
Growth forecasts averaged 8.5 percent year-on-year for the first quarter of 2022, jumping from 5.9 percent previously; 7.6 percent for the second quarter of next year, inching up from 7.5 percent; and 8.4 percent for the third quarter.
“Among the five Asean countries, the Philippines received a considerable upward revision of 0.8 [percentage] point in 2021 and 0.5 point in 2022. Expectations are rising for increased spending ahead of the May 2022 presidential election,” JCER said.
The JCER report showed the Philippines’ estimated 2021 growth rate would be Asean-5’s second-fastest, only exceeded by Singapore’s 6.8 percent.
GDP growth in 2023 was seen slowing to 5.9 percent, a higher forecast than 5.8 percent previously but below the government’s 6 to 7 percent target.
Fastest across Asean-5
Still, the Philippines’ GDP growth in 2022 and 2023 would likely be the fastest across the five Asean countries in JCER’s poll, which also covered China and India.
The Philippine economy shrank the worst in the region in 2020—its 9.6-percent GDP contraction last year was the worst recession post-war no thanks to one of the longest and most stringent COVID-19 lockdowns imposed by the government.
“Economists expect GDP levels to recover to prepandemic levels (2019) in Indonesia, Singapore and India in 2021, the Philippines and Malaysia in 2022, and Thailand in 2023,” JCER said.
The eight economists polled by JCER included Bank of the Philippine Islands lead economist Emilio Neri Jr., Barclays regional economist Angela Hsieh, BDO Unibank chief market strategist Jonathan Ravelas, De La Salle University school of economics associate dean Mitzie Conchada, ING senior economist Nicholas Mapa, Metrobank research analyst Pauline Revillas, Nomura chief economist Euben Paracuelles, and UnionBank chief economist Carlo Asuncion.
For 2022, Conchada said “one of the things that we look forward to … is the favorable impact of the national elections.”