Philippine economy grew 5.6% in 2021

THE Philippine economy grew 5.6 percent in 2021, after logging a 7.7 percent growth in the fourth quarter last year.

The full-year gross domestic product (GDP) exceeded the Development Budget Coordination Committee’s (DBCC) target of five to 5.5 percent.

In a joint statement released by the government’s economic managers said the fourth quarter growth was “much faster than most analyst forecasts, making the country’s expansion among the highest in the region.”

“This sends a strong signal that we are on track to rapid recovery despite the impact of Typhoon Odette,” the economic managers said Thursday, January 27, 2022.

The fourth quarter GDP growth is broad-based with all sectors growing: agriculture, 1.4 percent; industry, 9.5 percent; and services, 7.9 percent.

The actual 2021 GDP growth of 5.6 percent represents a sharp recovery from the 9.6 percent contraction in 2020, but lower than the 6.1 percent expansion in 2019, according to the Bangko Sentral ng Pilipinas.

For the full-year 2021, the industry and services sectors grew by 8.2 percent and 5.3 percent, respectively, representing a strong rebound from the contractions experienced by these sectors in 2020.

The agriculture sector, however, experienced a slight decline of 0.3 percent. This was brought about by the challenges the sector continued to face, such as the African swine fever and super typhoons, which affected agricultural production.

“This sustained growth was driven by the successful management of risks such as targeting the areas with highest risk and allowing the rest of the economy to open. Our policies to move from a pandemic to a more endemic paradigm have led to broad-based expansions across almost all sectors, despite challenges brought about by the continued persistence of Covid-19, various levels of quarantines, and prevalence of natural disasters,” the economic managers said.

On the expenditure side, private consumption grew by 4.2 percent, a stark reversal from last year’s -7.9 percent. This indicates returning consumer confidence as a result of relaxed quarantine restrictions and the accelerated vaccination program.

Government expenditure also expanded by seven percent. Meanwhile, external trade recovered at a faster pace in 2021.

Exports grew by 7.8 percent, compared to -16.3 percent in 2020. The same trend can be seen in imports with a sustained growth of 12.9 percent in 2021, compared to -21.6 percent in 2020.

Moreover, investments recorded a robust growth of 19 percent rebounding from -34.4 percent in 2020. This was supported by a 37.4 percent growth in public construction as the government proceeded full-steam ahead with the implementation of the Build, Build, Build infrastructure program.