THE Philippine economy may have breached P20 trillion for the first time, but per capita incomes of Filipinos are not yet back to what they were before the pandemic.
On Thursday, the Philippine Statistics Authority (PSA) disclosed that the economy grew 7.6 percent, the fastest in 46 years or in 1976 when GDP rose 8.8 percent.
In the last quarter of 2022, the PSA reported, the economy grew 7.2 percent, marking the seventh consecutive month of growth since the second quarter of 2021.
“It’s not enough that our economy is growing,” National Economic and Development Authority (Neda) Secretary Arsenio M. Balisacan said. “On a per capita basis, we actually haven’t recovered yet the 2019 per capita income level. So, we are not there yet.”
Based on data shared by National Statistician Claire Dennis S. Mapa, the country’s GDP in current prices reached P22.02 trillion in 2022 from P19.41 trillion in 2021; P17.95 trillion in 2020; and P19.52 trillion in 2019.
In constant prices, which is adjusted for inflation, GDP was at P19.95 trillion from P18.54 trillion in 2021; P17.54 trillion in 2020; and P19.38 trillion in 2019.
However, per capita gross national income in current prices reached P209,012 in 2022. This has exceeded the per capita gross national income of the country at P200,135 in 2019.
Per capita gross national income in constant prices, nonetheless, showed Filipinos only earned P188,939 in 2022. This is lower than the P198,522 per capita gross national income in 2019.
‘Policy biases’
“Current prices are different from real prices, and population has likewise increased,” Action for Economic Reforms (AER) Coordinator Filomeno Sta. Ana told the BusinessMirror. “Real prices are adjusted to inflation.”
Sta. Ana also said per capita incomes remain below the 2019 level because some of the “policy biases” of the administration are “exacerbating the food crisis.”
He called “half-baked” measures to address the affordability and accessibility of goods like sugar and onion. He noted that instead of focusing on creating new sources of funding for taxes, the government wanted to create a Maharlika Fund.
“Government policy making is astray. Government is not focused on addressing the high prices and the need for fiscal consolidation without impairing essential spending for health, education, climate change,” Sta. Ana said.
Ateneo de Manila University’s Leonardo A. Lanzona Jr.agreed with Balisacan when the latter said the economy’s near-8 percent growth in 2022 was not enough to increase per capita incomes.
Lanzona said the country’s recovery is slower than expected and “does not benefit everyone equally.” He said much of the country’s growth in 2022 was base effects and can only be felt by a number of sectors in the population.
“The inability to have reached prepandemic rates is due to the fact that GDP decreased by a very large amount during the pandemic so that even a growth rate close to 8 percent is not enough,” Lanzona said.
Given that base effects are expected to wear off, Lanzona said, the government’s efforts should not be “business as usual.”
Government programs and plans, he said, need to be more aggressive, particularly in responding to the scarring effects caused by the pandemic.
Simply inviting investors to come to the Philippines will not fulfill the country’s economic goals. “Inviting foreign investors will be futile unless we place the economy in much better standing. All those congratulatory remarks given in Davos are for nothing.”
Exceeding targets
Balisacan said the performance of the economy exceeded the target set by the Development Budget Coordination Committee (DBCC) of 6.5 to 7.5 percent in 2022.
The fourth-quarter GDP growth, Balisacan added, also exceeded the median analyst forecast of 6.8 percent.
He noted that performance in the last quarter of 2022 made the Philippines the fastest-growing economy in the region. It is trailed by Vietnam which grew 5.9 percent and China, 2.9 percent.
“We also observed an improvement in the quality of employment relative to the same period last year, as more workers found stable work in private establishments and became employed in full-time jobs,” Balisacan said.
“With the resumption of face-to-face classes, the boost in the activity of the small and large enterprises alike, and the resurgence of local tourism causing ripple effects towards the recovery of all the other sectors affected by the pandemic, we are confident that we will remain in our high growth trajectory,” he added.
The PSA said the main contributors to the fourth-quarter 2022 growth were: Wholesale and retail trade; repair of motor vehicles and motorcycles, 8.7 percent; Financial and insurance activities, 9.8 percent; and Manufacturing, 4.2 percent.
For full-year 2022, industries which contributed most to the annual growth were: Wholesale and retail trade; repair of motor vehicles and motorcycles, 8.7 percent; Manufacturing, 5 percent; and Construction, 12.7 percent.
Among major economic sectors, Industry and Services posted positive growths in the fourth quarter of 2022 with 4.8 percent and 9.8 percent, respectively.
Meanwhile, Agriculture, forestry, and fishing (AFF) shrank by -0.3 percent. On an annual basis, AFF, Industry, and Services all posted positive growths with 0.5 percent, 6.7 percent, and 9.2 percent, respectively.
On the demand side, Household Final Consumption Expenditure (HFCE) grew by 7 percent in the fourth quarter. Government Final Consumption Expenditure (GFCE), 3.3 percent; Gross capital formation, 5.9 percent; Exports of goods and services, 14.6 percent; and Imports of goods and services, 5.9 percent were other sources of growth for the quarter.
In 2022, HFCE grew by 8.3 percent; GFCE, 5 percent; Gross capital formation, 16.8 percent; Exports of goods and services, 10.7 percent; and Imports of goods and services, 13.1 percent.
Image credits: Nonoy Lacza