Economic managers are optimistic that given the faster rollout of vaccines and its adequate supplies, the country may be able to hit Alert Level 1 before New Year, which means that the economic rebound would begin in full steam.
GOVERNMENT economic planners have lots of works to do ahead of them if they are to attain robust economic growth that the country used to enjoy before the pandemic came and rained on the nation’s parade.
Mild growth
This, as the economy failed to make a huge leap and grew slowly during the third quarter by ‘mere’ 7.1 percent.
Indeed, the mild growth did not help the cause of the government’s revised upward target for the second quarter of 2021 of 12 percent.
Pandemic curbs
As usual, the slower growth (compared to revised target) was due to the strict lockdowns to curb the spread of the more contagious delta variant of COVID-19.
National Statistician Claire Dennis Mapa said the year- to- date GDP growth was 4.9 percent, within the upper end of the government’s revised downward target band of 4 to 5 percent for the whole of 2021.
Mapa said the economy needs to grow by 5.3% in the fourth quarter of the year to achieve the upper end of the government’s full-year growth goal.
Optimistic
Similarly, Socioeconomic Planning Secretary Karl Kendrick Chua was optimistic and said the growth for the remaining quarter is expected to be better with adequate supply of vaccine doses and the government’s accelerated vaccination program over the next few weeks.
Chua explained that in the third quarter, “we contained the Delta variant and sustained our economic expansion even as stringent quarantines were in place. Our strategy was correct. The results are clear.”
During the July to September period, Metro Manila - the Philippines’ economic center - was placed under the strictest enhanced community quarantine (ECQ) from August 6 to 20 followed by a prolonged modified ECQ from August 21 to September 15, wherein most business activities are prohibited, amid the threat of Delta variant.
“With current trends, we expect to achieve Alert Level 1 by the onset of the New Year,” Chua said in a statement from the economic managers of the Duterte administration.
Despite the strict lockdowns during the third quarter, Chua said that on a seasonally adjusted quarter-on-quarter basis the economy expanded by 3.8%.
Chua added the careful balance between COVID-19 and non-COVID-19 needs led to the continued expansion of most sectors.
Growth contributors
In particular, Mapa said the main contributors to the growth from the production side were wholesale and retail trade, repair of motor vehicles and motorcycles contributing 1.3 percentage points; manufacturing, sharing 1.04 percentage points; and construction with 0.95 percentage point contribution.
Major contributors to the GDP growth on the expenditure side were: household final consumption by 5.2 percentage points; construction, 2.5 percentage points; and government final consumption expenditure, 2.0 percentage points.
Relaxed restrictions
“We expect this to be sustained in the fourth quarter given more relaxed restrictions and a higher vaccination rate,” Chua said.
Among the major economic sectors, industry and services posted positive growths of 7.9% and 8.2%, respectively.
Agriculture, forestry, and fishing posted a contraction of -1.7% in the third quarter of 2021.
“The increase in palay production, which was aided by the continued implementation of the Rice Competitiveness Enhancement Fund, was more than offset by typhoon damages to other agricultural crops and by the African swine fever to livestock,” Chua said.
Total investments expanded by 22 percent driven by public and private construction with 55.3 percent and 12.2 percent.
“The government’s decision to allow all construction activities to resume regardless of the area’s quarantine status must be credited for this,” Chua said.
“Our external trade grew as well,” he added.
This, as exports grew by 9 percent while imports grew by 13.2 percent.
“The high growth of imports reflects the strong recovery of consumption and investment spending. The moderate growth of exports reflects both the global recovery as well as global logistics issues,” Chua noted.
Prospects
Chua said the National Capital Region’s shift to Alert Level 2 is “broadly in line with our target.”
The NEDA earlier estimated that Metro Manila’s de-escalation to Alert Level 2 can increase GDP by P3.6 billion and employment by 16,000 per week. Metro Manila is under Alert level 2 from November 5 to 21, 2021.
“To further sustain our growth this year and next year, the government will accelerate the vaccination program, reopen to Alert Level 1 in January 2022, and maximize the use of the 2021 budget,” he added.
Covid-19 resilient
In the remaining eight months of the Duterte administration, the NEDA chief said the government’s top priority will be laying the foundation for a “COVID-19 resilient society that can live with the virus.”
“We will return to the path of rapid and more inclusive growth. We owe this to the people. It will be done,” Chua said.
Tags: #economicmanagers, #GDP3Qgrowth, #economy