Philippine economy rebounds 5.6% in 2021

The Philippine economy rebounded 5.6 percent in 2021 from a 9.6-percent contraction in 2020, according to the Philippine Statistics Authority.

Economic managers said the numbers for 2021 show an economy primed to break out. The gross domestic product grew 7.7 percent in the fourth quarter, following a 6.9-percent expansion in the third quarter and 12-percent rise in the first quarter.

"In the last quarter, we further recalibrated our strategies by shifting to the alert level system with granular lockdowns. Our efforts to safely reopen the economy allowed more Filipinos to work and earn their income. In November 2021, the unemployment rate declined to 6.5 percent, the lowest since the start of the pandemic. This led to a net employment creation of 2.9 million above pre-pandemic levels," they said.

On a seasonally adjusted quarter-on-quarter basis, the economy expanded by 3.1 percent in the fourth quarter, 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 team said.

The robust fourth-quarter expansion brought full-year 2021 GDP growth to 5.6 percent, exceeding the Development Budget Coordination Committee’s target of 5.0 percent to 5.5 percent. 

"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," they said.

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.

On the expenditure side, private consumption grew by 4.2 percent, a stark reversal from 2020'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 7 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.

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.

"The strong 2021 performance shows us that we are on the correct path to a resilient recovery. The stage is now set for growth to accelerate in 2022," the economic managers said.

They said that while COVID-19 risks increased at the beginning of the year due to the highly transmissible Omicron variant, the country was able to limit severe cases and deaths relative to the total number of cases, because of our accelerated vaccination program and improvements in the healthcare system.

With the shortened interval for booster shots and the expansion of the vaccination program to children aged 5 to 11 years old starting this February, more Filipinos can avail of these life-saving doses. 

When approvals are available, the government also aims to expand vaccination to those aged zero to four years old. All of these will enable the safe and full reopening of the economy, allowing more Filipinos to work and earn a living, and restarting all face-to-face learning.

"We are optimistic that we will not only recover to the pre-pandemic level in 2022, but achieve the upper-middle income country status. We have put in place several game-changing reforms throughout the Duterte administration, and we will not slow down in these final months. We will continue to pursue structural reforms that will make the country more resilient against future crises and solidify our growth prospects," the economic team said.

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