THE Philippine economy grew by 8.3 percent in the first quarter of 2022 despite experiencing a spike in Covid-19 cases in the same period.
"This is a significant reversal from the 3.8 percent contraction in the same period last year. We have surpassed the pre-pandemic gross domestic product level," the country's economic managers said in a joint statement on May 12, 2022.
The team of economic managers under President Rodrigo R. Duterte's administration is composed of Socioeconomic Plannng Sec. Karl Kendrick T. Chua, Department of Finance Sec. Carlos G. Dominguez, and Department of Budget and Management officer-in-chare Tina Rose Marie L. Canda.
The country's 8.3 percent gross domestic product growth makes it "the fastest growing economy in the East Asia Region for the period."
"The headwinds we faced were strong, but our quick rebound from the Omicron surge in January proved that we can live and deal with the virus. With our strengthened healthcare capacity and accelerated vaccination program, we were able to contain the surge and safely reopen the economy," the economic managers said.
They said since some areas in the country have been placed under Alert Level 1, ot allowed better mobility for the people. Likewise, the resumption of more businesses allowed more to return to work.
"Google mobility data improved further when we lowered the alert levels. Visits to the transit stations are now 30 percent higher than the pre-pandemic level, while visits to workplaces have also exceeded the pre-pandemic level by around 20 percent," economic managers said.
Data from the Philippine Statistics Authority (PSA) showed that "unemployment rate in March 2022 fell to 5.8 percent, the lowest since the start of the pandemic. Employment creation is now at 4.4 million above the pre-pandemic level."
"We have restored many jobs and livelihood by shifting to a more endemic mindset, accelerating vaccination, and implementing granular lockdowns that only targeted the areas of highest risk while allowing the majority of our people to work and earn a living," the economic managers said.
Meanwhile, the country's economic managers reported that the industry, services, and agriculture sector have shown positive growth.
"On the production side, all sectors expanded, driven by industry and services at 10.4 percent and 8.6 percent, respectively. Meanwhile, agriculture slightly improved by 0.2 percent as growth was hindered by the African Swine Fever and elevated prices of agricultural commodities such as corn, pork, and sugar," they said.
Economic managers also reported a spike in private spending in the first quarter.
"On the expenditure side, growth was driven by private consumption which went up by 10.1 percent, a stark reversal from the -4.8 percent figure in the same period last year. With much-relaxed quarantine restrictions and more vaccinated Filipinos, family activities, leisure, travel, and tourism have all grown significantly," they said.
It was also reported that investments recorded "a robust growth of 20 percent from -13.9 percent in 2021." Meanwhile, exports expanded by 10.3 percent, and imports grew by 15.6 percent.
However, government spending slowed down by 3.6 percent in first quarter of 2022 from 16.3 percent in the same period in 2021. This is due to public construction contracting by 4.9 percent because of the election spending ban that began towards the end of the first quarter.
"We expect both of these to accelerate in the second half of the year," the economic managers said.
Outlook
The country's economic managers said the strong 8.3 percent economic growth in the first quarter of 2022 is an indication that the country is on track in achieving its growth target of 7 to 9 percent this year.
"To sustain our growth momentum, President Duterte issued Executive Order (EO) No. 166 to implement the Economic Development Cluster’s (EDC) 10-point policy agenda for a strong recovery. We have made meaningful progress in most indicators. We can clearly see how hard-hit sectors like tourism and leisure have recovered from a sharp drop in demand," the group said.
However, the economic managers pointed out that it is also important for face-to-face classes to fully resume.
"More than the foregone economic activity due to school closures, we are very much concerned about the learning loss and impact on future productivity of our children," they said.
The group has reiterated its call for the resumption of face-to-face schooling.
"This will help secure better opportunities for future generations and ensure that our demographic dividends will not be wasted," they said.
Another strategy the government is expected to implement to sustain its gains is to continue how it manages inflation.
"The economic team has recommended the extensions of Executive Orders 134 and 135 to expand our supply of pork and rice. The EDC also recommended a temporary reduction of the most favored nation tariff rate for corn, a primary ingredient in animal feeds. All these will help ease inflationary pressures and stabilize food prices," the economic managers said.
They added that the continued targeted subsidy programs will also help cushion the impact of rising oil prices. (RJL)