Finance Secretary Benjamin Diokno said Wednesday the “worst is over” for the Philippine economy, and the 2022 gross domestic product growth may expand faster than the target range of 6.5 percent to 7.5 percent despite the threats of continuing domestic and external headwinds.
“After the highly unprecedented pandemic, followed by Russia’s invasion of Ukraine and a weakening China growth, the global economy is likely to face a mild recession next year. But for the Philippines, the worst is over, and better years are expected,” Diokno said in his assessment of the economy.
He said the Philippines did very well in 2022 politically and economically, given the smooth transition of power after the peaceful presidential elections in May 2022.
“On the economy, after a modest recovery in 2021, the Philippine GDP will likely grow much faster than the official target range of 6.5 to 7.5 percent this year. All sectors will be surging, led by manufacturing and construction, while strong domestic demand is supplemented by exports,” he said.
Diokno said several factors would boost economic growth in 2023, such as the improvement in the labor market, recovery of manufacturing, manageable inflation, early approval of 2023 national budget, stable banking system, strong credit profile, hefty international reserves and the continued push for infrastructure projects.
He said the manufacturing sector is one source of optimism. The S&P Global Philippines PMI has mostly been on an expansion mode, reaching 52.7 percent index points in November. Jobs in the manufacturing sector increased 10.42 percent year-on-year in October as improved sales signaled business expansions and higher capacity use.
Unemployment rate slid to 4.5 percent, lower than 5.3 percent during the pre-pandemic period. There were 4.6 million new jobs in October 2022 compared to the level posted in the pre-pandemic period. Underemployment in October at 14.2 percent was lower than 14.8 percent registered in January 2020 at the outset of the pandemic.
Diokno said inflation, which has been a challenge for almost all countries, would likely ease next year and would be within the target band of 2.0 to 4.0 percent by 2024.
This positive prediction is based on the very close coordination between monetary and fiscal authorities and the falling prices of oil and related commodities, he said.
Meanwhile, Filipino-Chinese entrepreneurs expect the economy to grow by 6.5 percent to 7.5 percent in 2023. “We believe that Philippine economic and demographic fundamentals are positive, the ASEAN economic dynamism shall continue and the world’s No. 2 biggest economy China shall do well in its reopening after the global pandemic,” the Federation of Filipino Chinese Chambers of Commerce & Industry Inc. said Wednesday at the Pandesal Forum hosted by Kamuning Bakery in Quezon City.
FFCCCII president Henry Lim Bon Liong said the group remained optimistic that the Philippine’s actual growth in 2022 would be within the vicinity of 6.5 to 7.5 percent.
“The Philippines is still a source of hope and recovery for Asia due to our positive economic and demographic fundamentals, and with the earnest leadership of President Bongbong Marcos committed on upgrading infrastructures, improving agriculture and pushing many reforms,” Liong said. With Othel V. Campos