PHL posts 5.6 percent overall growth based on GDP for whole year of 2021
(Eagle News) – The Philippine economy grew further last year despite the Covid-19 pandemic and the highly debilitating Delta variant, as gross domestic product posted a growth of 7.7 percent in the fourth quarter.
Because of this, the country’s GDP posted an over-all growth of 5.6 percent for the whole year of 2021, according to the latest data from the Philippine Statistics Authority (PSA).
With this latest data, economic managers of the Duterte administration see the country’s economy would further grow this year, and hopefully return to pre-pandemic levels despite the impact of supertyphoon Odette (international name Rai) which affected several regions in the country from southern Luzon, Visayas, and Mindanao. The typhoon made a record of nine landfalls in the country from December 16 to 17 last year.
The Philippine economy has in fact rebounded stronger than expected in 2021. This was due to the relaxation of Covid-19 rules fuelled consumer spending and got more people back to work, officials said Thursday, January 27, as they forecast a return to pre-pandemic growth this year.
In 2020, there was a 9.6 percent slump, the worst since World War II, mostly fuelled by crippling lockdowns destroying millions of jobs and forcing people to stay home.
The latest reading beat the median forecast of 5.1 percent growth expected by analysts surveyed by Bloomberg.
-Main contributors to 4th quarter growth-
The PSA said that the main contributors to the fourth quarter 2021 growth were: Manufacturing, 7.2 percent; Wholesale and retail trade; repair of motor vehicles and motorcycles, 7.4 percent; and Construction, 18.5 percent.
The same industries also contributed the most to the annual growth: Manufacturing, 8.6 percent; Wholesale and retail trade; repair of motor vehicles and motorcycles, 4.3 percent; and Construction, 9.8 percent.
-Gross nat’l income growth by 8 percent in 4th quarter-
Even the Gross National Income (GNI) grew by 8 percent in the fourth quarter of 2021, according to the PSA.
The fourth quarter was when the country had instituted the Covid-19 alert level system where granular lockdowns were implemented, instead of region-wide community quarantine classifications.
This promoted more businesses to open and more people to go to work.
The Net Primary Income (NPl) from the rest of the world also grew by 15 percent last year. But on an annual basis, the NPl declined by -50.2 percent while GNI grew by 1.6 percent.
-Sectors that posted positive growth-
“Among the major economic sectors, agriculture, forestry, and fishing, industry and services all posted positive growths in the fourth quarter with 1.4 percent, 9.5 percent, and 7.9 percent, respectively,” according to the PSA report written by National Statistician and Civil Registrar General Undersecretary Dennis S. Mapa, Ph.D.
“On an annual basis, Industry and Services registered positive growths of 8.2 percent and 5.3 percent, respectively. Meanwhile, Agriculture, forestry, and fishing posted a contraction of -0.3 percent,” it said.
On the demand side, Mapa said Household Final Consumption Expenditure (HFCE) grew by 7.5 percent in the fourth quarter of 2021.
The following items also recorded growth: Government Final Consumption Expenditure (GFCE), 7.4 percent; Gross Capital Formation (GCF), 12.6 percent; Exports, 8.3 percent; and Imports, 13.7 percent. On an annual basis, HFCE grew by 4.2 percent, GFCE, 7.0 percent; GCF, 19.0 percent; Exports, 7.8 percent; and Imports, 12.9 percent.
The surprising performance was driven by a pick-up in consumer spending and construction in the second half of the year as restrictions eased and coronavirus infections fell.
“The door to our economic recovery is now fully open,” Socioeconomic Planning Secretary Karl Chua told a briefing.
“We are optimistic that we will not only recover to the pre-pandemic level in 2022, but achieve the upper middle income country status.”
Even factoring in the impact of Super Typhoon Rai, which devastated central and southern regions of the country in December and left hundreds of thousands homeless, the Philippines was “on track to rapid recovery”, Chua said.
The main risk to the outlook was the emergence of another variant of the virus, he added.
Chua said a change in the government’s response to Covid-19 — from widespread lockdowns to more granular measures — and increased vaccination and hospital capacity had enabled greater economic activity.
“Our efforts to safely reopen the economy allowed more Filipinos to work and earn their income,” he said.
The government tightened restrictions across the national capital region and other provinces in recent weeks as the hyper-contagious Omicron variant fuelled a record surge in infections.
Chua said the spike appears to be “of a very temporary nature” and played down the impact on the first-quarter.
“Growth is sustainable and we believe there is an opening for us to see a lower alert level in the coming weeks,” he said.
But Capital Economics Emerging Asia economist Alex Holmes warned the “overall recovery has a long way to go”.
“The economy will remain in catch-up mode throughout 2022,” he said in a research note.
More than 3.4 million infections have been recorded in the Philippines since the start of the pandemic, with more than 53,000 deaths.
(with a report from Agence France-Presse)