GDP growth in 2021 fuels optimism for economic progress
Published Jan 29, 2022 12:05 am
The Philippine economy recovered in 2021, registering a full-year growth in Gross Domestic Product (GDP) of 5.6 percent and fueling optimism that it would soon bounce back to pre-pandemic levels.
Noting that the country’s GDP growth was among the highest in the region, Socioeconomic Planning Secretary Karl Kendrick T. Chua declared that “the door to our economic recovery is now fully open,” and hoped that the Philippines would “achieve the upper-middle income country status” in 2022.
A strong fourth-quarter growth of 7.7 percent – characterized by a private bank economist as “surprise supercharged revenge spending” – was the key driver for the year-ending surge. Recall that the lifting of mobility restrictions under Alert Level 2 brought on heavy spending on recreation and culture (up by 41.6 percent) and in restaurants and hotels (up by 21.9 percent).
Despite the positive growth, the nominal value of goods and services produced by the country from January to December amounting to P19.387 trillion was short by P131 billion against the pre-pandemic level of P19.518 trillion.
According to the Philippine Statistics Authority (PSA), the three leading growth sectors were construction, 9.8 percent; manufacturing, 8.6 percent; and the combination of wholesale and retail trade; repair of motor vehicles and motorcycles, 4.3 percent. Evidently, the growth in construction was spurred primarily by the government’s infrastructure program. Manufacturing was boosted by stronger demand and higher productivity due to reduced work stoppage as the government modified its stringent quarantine policy.
While industry and services posted positive growth of 8.2 percent and 5.3 percent, respectively, the rural populace continued to languish amid the doldrums in the agriculture, forestry, and fishing sectors that logged a minus 0.3 percent contraction.
The PSA also reported that Gross National Income (GNI) grew by 1.6 percent on a full-year basis, boosted by a fourth-quarter growth of 8 percent. The gross national income, previously known as gross national product (GNP), is defined as “the total domestic and foreign output claimed by residents of a country, consisting of gross domestic product, plus factor incomes earned by foreign residents, minus income earned in the domestic economy by nonresidents.”
How the government managed the national health emergency brought on by the coronavirus pandemic shaped the final outcome of annual GDP growth. The numerous recalculations and revisions of growth targets were made by the economic managers on account of the seesawing pattern of surge and decline of COVID-19 infections brought on by the Delta and Omicron variants.
From total lockdowns, the government shifted to an alert level system that focuses on managing mobility – while giving primary impetus to continued operations of factories, offices, malls, and stores. Thus did the government manage to reduce highly disruptive job losses that also brought on episodes of involuntary hunger among the poorest families.
The election campaign season from February to May is expected to boost economic activity for the first half of the year. Filipinos will soon elect a fresh set of leaders that would hopefully lead the country to sustained economic growth and improved quality of life.