"The current quarter is not living up to the best expectations."
At the end of 2020, economists and business analysts fervently hoped that the Philippine economy would begin to execute the long-awaited turnaround and would post even modest growth in the new year’s first two quarters. In the face of the government’s below-par management of the anti-COVID-19 program — inadequate testing and tracing, and slow vaccine rollout, non-payment of frontliner benefits, inadequate hospital supplies, poor coordination with local government units and the private sector, and, lately, corruption — there was just no way that the economy could turn the corner in 2021’s first two quarters.
But the economists and financial analysts persisted in their incredibly sanguine expectations of the Philippine economy’s performance in the second year of the pandemic. Forecasts of gross domestic product growth ranging up to 6.5 percent continued to emerge from the forecasters’ officers, with the third quarter as the source and starting point of the great 2021 rebound.
The July-to-September period would see a strong turnaround in business-community sentiment and a significant rise in consumer confidence. There was widespread talk of a third-quarter GDP growth figure that would sufficiently compensate for the preceding two quarters’ disappointing outturns. Then came the surge of the Delta variant and the placement of the National Capital Region under another tough lockdown in early August. Even without the lockdown, economic activity in the Philippine economy’s most important component was exhibiting signs of a surge about to happen. At that point, less than 20 percent of the national population had been fully vaccinated.
When it became abundantly clear that the third quarter was not going to be 2021 GDP’s savior, the economic forecasting country’s attention began to turn to the current quarter. The fourth quarter has got to be it — the period when the economy would snap out of the COVID-19 doldrums and get back to work. Nonetheless, it lowered its 2021 GDP growth targets — mostly lower than 5 percent — just in case.
Like the third quarter, the current quarter is not living up to the best expectations, thanks in no small measure that NCR remains under quarantine with Alert Level 3 limitations. The region that accounts for an estimated 25 percent of the nation’s GDP is still not a beehive of activity; its economic performance thus far in the year’s final quarter is, in fact, lackluster. With almost a third of the quarter gone, not much should be expected of this three-month period.
The economists and bank forecasters should stop expecting the evidently unlikely. They should resign themselves to the fact that 2021 will be the latter half of a two-year period of comparatively low growth for the Philippine economy. If some bonanza were to come the Philippine economy’s way in the year’s remaining ten weeks, it would not make much of a difference. This year is almost played out.
GDP growth of around 4 percent in 2021? That’s where things seem headed.