Lopez confident of PH full economic recovery next year

The easing of restrictions to Alert Level 2 for Metro Manila has shown positive impact to businesses that could lead to a more robust fourth quarter growth to end the year with a very likely 5 percent full year gross domestic product (GDP) and full economic recovery by 2022, Trade and Industry Secretary Ramon M. Lopez said.

Trade and Industry Secretary Ramon M. Lopez

At the virtual Laging Handa Public Briefing, Lopez reported of the good feedback from business establishments a week after the capital region was placed under a more relaxed Alert Level 2.

According to Lopez, malls and establishments reported of between 50 percent to as high as 80 percent foot traffic of pre-pandemic level as most sectors have been opened, and the return of more workers. With this positive trend, Lopez expects the return to a more robust business and more jobs generation in the fourth quarter.

Given the higher than expected 7.1 percent Q1 GDP growth and a 4.9 percent GDP in the January to September period this year, Lopez is confident of a very likely 5 percent GDP growth for 2021.

Based on his computation, the economy needs to grow 5.3 percent only in the 4th quarter to hit the 5 percent full year growth. And to hit 5.5 percent full year GDP, the economy needs to grow 7.1 percent in the fourth quarter. “That is the potential the economy can grow between 5 to 5.5 percent for full year in 2021,” he said.

If that happens, the DTI chief said, by 2022 the economy will need to grow 4.8 percent to be a able to return to the 2019 GDP level of 6.1 percent or a recovery to the pre-pandemic level where the Philippines was the second fastest growing economy in ASEAN.

The government has revised downward its GDP growth this year to 4-5 percent and 7-9 percent growth in 2022.

Based on the 4.9 percent growth for the January-September period this year, growth, Lopez concluded that 2021 is not year a recovery year but, 2022.

“So, 2022 really is the year of recovery back to 2019 level and the prognosis is good because starting October the Alert Level was already at Level 3 and then Level 2 so there are more opening of business establishments and at higher capacity,” he said.

The rollout of more vaccines and massive vaccination with the National Capital Region almost reaching 100 percent herd immunity of targeted population and more treatments, Lopez said these will all contribute to lesser COVID cases, lower deaths, more jobs generation, and ultimately stronger economic performance and full economic recovery.

In addition, he cited the growth in foreign direct investments in the country, which is growing 33 times higher than the 2019 level, and robust exports. He cited these factors as very important factors to GDP growth.

In terms of industries, Lopez said that electronics will continue to account as biggest dollar earner accounting for 62 percent of total. Aside from manufacturing, he said, other export contributors are services, agri products, minerals, among others.