GDP growth of 6.3% in 2021
The Philippine economy likely grew more than 6% in the fourth quarter of 2021, bringing year-to-date growth to 5.2% as the easing of quarantine restrictions boosted household consumption, said analysts interviewed by the Manila Times.
Projections for the period ranged from 5.3 to 7.0% with an average of 6.3%, slower than the 7.1% expansion in the third quarter, but a reversal from the contraction of 8, 3% in the fourth quarter of 2020.
Analysts said the full-year GDP contraction was likely to come in at 5.2%, the upper limit of the government’s 5-5.5% target. It will also be a reversal from the 9.6% contraction in 2020.
Official Philippine economic growth data for the fourth quarter and full year 2020 is expected to be released by the Philippine Statistics Authority (PSA) on January 27.
The chief economist of Rizal Commercial Banking Corp. (RCBC) Michael Ricafort forecast fourth-quarter GDP growth to hit 7.0% as quarantine restrictions eased which helped businesses operate at higher capacity.
Most parts of the country were placed under Alert Level 2 during the fourth quarter of 2021 which, according to Ricafort, also allowed “the elderly and minors to finally leave their homes after [being] confined to their homes for more than a year and a half.”
“Restrictions on domestic travel have also been relaxed, such as not requiring negative PCR (polymerase chain reaction) tests at the discretion of local government units, thereby boosting local travel and tourism,” Ricafort said. .
Ricafort, however, said offsetting risk factors in the quarter include concerns over the Covid-19 Omicron variant and Typhoon “Odette” which caused damage in the Visayas and Mindanao.
Nicholas Mapa, chief economist at ING Bank Manila, predicts economic growth will reach 6.7%.
“Strong household consumption rebounded as consumer and business sentiment improved amid falling Covid infections. That number would have been higher, but super typhoon storm damage likely undermined some This should lift full-year GDP to 5.4%, at the upper end of the growth target, but well below the original growth target of 6.5 to 7.5%,” Mapa said.
Omicron cannot be overlooked
He, however, stressed that the economic recovery this year will be affected by the surge in Covid-19 cases.
“However, the outlook for 2022 has been clouded by the recent spike in cases, possibly due to the Omicron variant. Business and consumer sentiment, which had made gains in Q4 (Q4) 2021, has probably backed off somewhat in reaction to the recent reimposition of lockdowns,” Mapa said.
“The Philippines has had a decent 2021 in terms of growth, but it remains to be seen whether this type of expansion can continue without a favorable base and with the uncertainty that possible new variants of Covid-19 could bring” , he added.
Standard Chartered Bank’s economist for Asia and the Philippines, Jonathan Koh, meanwhile predicts that economic expansion will come in at 6.5%, mainly due to improved mobility.
“So if let’s say we were to take a look at the average mobility for transport as well as workplaces, which I think is a good indicator of economic activity, we see that actually the average is the best since the first quarter (first quarter) of 2020. So the restrictions have actually been eased in the Philippines and are going to level two, I think mobility has actually resumed and economic activity has resumed,” he said. he declares.
An economist from Security Bank Corp. (SBC) predicted 5.8% growth in the economy.
“Domestic activity, notably the retail footprint, was above pre-pandemic levels for most of 4Q21 (fourth quarter 2021) amid easing restrictions during peak spending in As with 3Q21 (third quarter 2021), private consumption may have been the main driver of growth once again,” said SBC Chief Economist Robert Dan Roces.
Roces noted that while the damage from Storm Odette may have reduced some growth potential, the mere upturn in activity, especially in the capital region, will likely be enough to boost growth.
However, he also warned that the Omicron variant could worsen the seasonal slowdown in the first quarter of the year.
“We expect consumer confidence to re-emerge in 1Q22 (Q1 2022), but sentiment should turn around quickly and point higher once Omicron passes,” Roces said.
ANZ Research, meanwhile, gave the lowest projection of 5.3%
In a report, ANZ Research said mobility data in the quarter largely improved on the back of increased vaccination, which likely supported growth in private consumption.
“During the quarter, there was a slight slowdown in mobility towards the end of December. During this time, fiscal spending remained strong based on monthly data for October and November,” he said. .