AFTER contracting by 9.5 percent in 2020, the Philippine economy is poised to rebound by around 7 percent this year, according to a recent economic forecast.
Makoto Tsuchiya, economist at Oxford Economics, said in a recent report that the country’s gross domestic product (GDP) is anticipated to rise by around 7.7 percent this year amid eased lockdown restrictions.
“We expect the recovery to continue through this year with growth set to gain a firmer footing in [second half] as the rollout of vaccines should allow for a sustained easing in restrictions and the recovery in global trade broadens,” Tsuchiya said.
“In particular, the recovery in construction should gather pace due to a catch-up in infrastructure investment as social distancing restrictions should ease further, barring another significant wave of outbreak,” he added.
Bank of the Philippine Islands (BPI) Lead Economist Emilio Neri Jr., meanwhile, said that the baseline forecast this year stands at 6.8-percent GDP growth.
“Assuming that the government will not impose additional restrictions on movement, double-digit GDP growth may be seen during some quarters of 2021,” he explained in a recent report.
The Palace recently announced that Metro Manila, Cordillera Administrative Region, Batangas, Tacloban City, Davao City, Davao del Norte, Lanao del Sur and Iligan City are placed under general community quarantine in the entire month of February.
Neri said a mild GDP contraction is still expected in the first quarter, but noted that consumer confidence is recording some uptick according to recent mobility data.
Consumers learned to follow necessary precautions so they can “confidently” go out, the BPI economist said, adding that easing transport protocols helped as well.
Moreover, Neri said that online shopping has gained more traction, which can boost consumer spending recovery this year.
“However, even at this brisk pace, economic output will not be able to return to the 2019 level yet, and a full recovery may only happen in 2022,” he said. “On the other hand, uncertainties still remain and another lockdown may prevent the economy from reaching more than 6-percent growth.”
Q4 GDP performance
IN the fourth quarter, Neri said that while the contraction was lower than their estimate, it was still quite “sizable.” GDP fell by 8.3 percent in the last quarter.
Mobility in public places began increasing only by last week of November last year, he said, even though relaxed restriction protocols were already implemented in the previous months.
The December’s mobility surge amid the holidays prevented the economy from plunging by double-digits in the last quarter, he added.
Apart from lockdown restrictions, Oxford Economics said that “adverse weather conditions also weighed on the economy” during the fourth quarter. A recent series of typhoons devastated several parts of the country.
The Cabinet-level Development Budget Coordination Committee is anticipating the GDP growth to be at 6.5 percent to 7.5 percent in 2021 and 8 percent to 10 percent in 2022.