The Philippine economy rebounded with a 5.6-percent growth in 2021 from a contraction of 9.6 percent in 2020, as the government’s recalibrated strategies to contain the pandemic led to more business activities in the fourth quarter.
“The door to our economic recovery is now fully open. The numbers for 2021 show an economy primed to break out,” the government’s economic managers said in a joint statement Thursday.
Data from the Philippine Statistics Authority showed the gross domestic product grew 7.7 percent year-on-year in the fourth quarter and 3.1 percent on a seasonally adjusted quarter-on-quarter basis.
“This growth performance was much faster than most analyst forecasts, making the country’s expansion among the highest in the region. This sends a strong signal that we are on track to rapid recovery despite the impact of typhoon Odette,” the economic team said.
“Our strategies in 2021 have culminated in a full-year growth that exceeded targets and expectations. In the last quarter, we further recalibrated our strategies by shifting to the alert level system with granular lockdowns. Our efforts to safely reopen the economy allowed more Filipinos to work and earn their income. In November 2021, the unemployment rate declined to 6.5 percent, the lowest since the start of the pandemic. This led to a net employment creation of 2.9 million above pre- pandemic levels,” they said.
The actual expansion in 2021 exceeded the 5 percent to 5.5 percent growth estimate of the interagency Development Budget Coordinating Committee, prompting economic managers to say that a recovery to the pre-pandemic level—where annual GDP averages over 6 percent–might happen in 2022.
National statistician and civil registrar general Dennis Mapa said the economy rebounded strongly in the fourth quarter with a growth of 7.7 percent, following a contraction of 8.3 percent a year ago. The fourth-quarter growth was also faster than the revised 6.9-percent expansion in the third quarter.
Mapa said that in terms of nominal value, the 2021 GDP reached P19.38 trillion, up from P17.93 trillion in 2020, but still down from P19.51 trillion in 2019 before the pandemic struck.
Economic Planning Secretary Karl Kendrick Chua said the expansion last year was achieved despite the impact of typhoon Odette in December.
Chua said with this performance, the economy was on track to a “rapid and resilient recovery” in the months ahead. He said the full-year growth was “among the highest in the region.”
The economic managers, composed of Chua, Finance Secretary Carlos Dominguez III and Budget Department officer-in-charge Tina Rose Marie Canda said the expansion in the vaccination program—to include children ages 5 to 11—would enable the safe and full reopening of the economy, allow more Filipinos to work and earn a living and restart all face-to-face learning.
“We are optimistic that we will not only recover to the pre-pandemic level in 2022, but achieve an upper middle income country status.. We will continue to pursue structural reforms that will make the country more resilient against future crises and solidify our growth prospects,” they said.
“The Duterte administration will stay the course until its last hour in office. We remain committed to rebuilding a stronger economy,” the economic managers said.
Bangko Sentral ng Pilipinas Governor Benjamin Diokno said the actual 2021 GDP growth of 5.6 percent represented “a sharp recovery from the 9.6-percent decline in 2020.”
Michael Ricafort, chief economist of Rizal Commercial Banking Corp., said among the bright spots for the economy are the near record high remittances, exports, imports, foreign direct investments and manufacturing.
“Other growth drivers include further re-opening of the economy towards greater normalcy especially in the latter part of 2021, increased infrastructure spending at double-digit growth levels to pump-prime/stimulate the economy and in preparation for the May 2022 presidential election,” Ricafort said.
“Philippine GDP could return to pre-pandemic levels in pesos in the latter part of 2022 at the earliest and GDP growth could return to pre-pandemic levels also in 2022,” Ricafort said.
The PSA said the industry and services sectors registered growths of 8.2 percent and 5.3 percent, respectively in 2021 while the agriculture, forestry and fishing sector contracted 0.3 percent.
Household final consumption expenditure grew by 4.2 percent last year; government final consumption expenditure, 7.0 percent; gross capital formation, 19.0 percent; exports, 7.8 percent; and imports, 12.9 percent.
Net primary income from the rest of the world fell 50.2 percent in 2021, while the gross national income grew by 1.6 percent.