AMID the unprecedented Covid-19 pandemic and the ongoing global uncertainties, the Philippines has transformed into one of the fastest-growing economies in the world, Finance Secretary Benjamin Diokno said on Monday.
“The Philippines did not sit idly by and wait for the virus to fade. Instead it adopted new laws to open up the economy to foreign investors and make the economy vibrant and competitive,” Diokno said at the sidelines of the World Bank-International Monetary Fund spring meeting.
The economic numbers support the positive outlook, he asserted.
“The Philippine economy grew by 7.6 percent in 2022, the highest in 46 years, exceeding the growth assumption of 6.5 percent to 7.5 percent by the Development Budget Coordination Committee [DBCC],” the secretary said.
Furthermore, the 2022 GDP (gross domestic product) growth exceeded the median forecast of local private sector analysts (7.5 percent) and economic projections by the IMF (6.5 percent), the World Bank (7.2 percent), Asean+3 Macroeconomic Research Office (7.3 percent) and the Asian Development Bank (7.4 percent), he added.
Growth was broad-based, with all sectors growing despite the increase in world and domestic commodity prices. Services grew by 9.2 percent, industry by 6.7 percent, and agriculture by 0.5 percent, the finance chief said.
“The growth drivers on the demand side include household consumption, government spending, investment, and net export,” Diokno said.
Household consumption is also expected to grow significantly because of a better jobs market, direct measures to ease price pressures, lower income tax rates because of the TRAIN Law, continued growth in overseas Filipino remittances, and targeted interventions to preserve purchasing power.
Government spending is expected to pick up with the early approval and timely implementation of the 2023 National Budget, the finance chief said.
“Infrastructure programs are expected to accelerate with the support of public-private partnership [PPP] mechanism; implementation of investment-inducing reforms such as amendments to the Public Service Act, Foreign Investment Act, Retail Trade Liberalization Act and the Corporate Recovery and Tax Incentives for Enterprises [CREATE]; wider financial inclusion; greater adoption of e-commerce; more investments into modernization and agri-business,” Diokno added.
Inflation eases
Meanwhile, inflation has cooled down to 7.6 percent in March 2023 from 8.6 percent in February 2023.
This, he said, is within BSP’s March inflation forecast at 7.4 -8.2 percent, but much lower than the median forecast of private analysts of 8.1 percent. “The main source of the decline in headline inflation is the lower contribution to overall inflation of food and non-alcoholic beverages, transport, housing, water, electricity, gas and other fuels,” according to Diokno.
President Ferdinand Marcos Jr. remains on top of the situation as his administration continues to adopt a whole-of-government approach to tackle inflation, said the DOF chief.