- Clean governance, strong leadership, infrastructure seen as key economic drivers.
- Better-than-expected numbers seen following 7.7% spike in Q42021, reversing record 2020 contraction.
The Philippine economy jumped 5.6% in 2021, in a better-than-expected performance following the COVID-driven record 2020 slump.
On Thursday (January 27, 2022), the government said the rebound following the 2020 recession was driven by productive sectors as the economy reopened in the third quarter of 2021.
Recovery: Higher than expected
The growth rate was higher than an earlier estimate made by the Asian Development Bank, which projected the country’s GDP to grow at 4.5% in 2021.
National Statistician Dennis Mapa said gross domestic product (GDP) in the fourth quarter of 2021 expanded by 7.7 per cent year-on-year, reversing the 2020 contraction, the worst recorded since World War 2.
In the Q3 of 2021, GDP increased by 3.1 per cent compared to the same period in 2020. The full-year growth slightly exceeded the government’s 5 to 5.5 per cent goal for 2021.
Economic growth in 2021 also reversed the record 9.6-per cent GDP drop in 2020 as the most stringent COVID-19 lockdowns shed millions of jobs and shut down businesses.
The country’s annual growth rate averaged 3.56 per cent from 1982 until 2021, reaching an all time high of 12 per cent in the fourth quarter of 1988 and a record low of -17 per cent in the second quarter of 2020.
What accounts for the country’s pre- and post-pandemic economic growth?
The average annual growth between 2001 and 2009 was 4.6%, and between 2010 and 2019, it shot up to 6.4%.
Investopedia reports the following growth factors for the country: Clean governance, strong leadership, growing infrastructure, and policy endeavours have catapulted the Philippines onto a path of faster growth.
At the end of 2021, GDP in Philippines was expected to reach $373.00 billion, according to Trading Economics global macro models and analysts expectations.
Most parts of the country were placed under Alert Level 2 during the fourth quarter of 2021. After being restricted in their homes for more than 1.5 years, senior citizens and minors were also allowed to finally go out.
Easing of domestic travel restrictions, and not requiring negative PCR tests upon the discretion of the local government units, helped spur up local travel and tourism, though fresh Omicron-related restrictions were reimposed on the capital and neighbouring provinces earlier this month.
The Philippines GDP is projected to trend around $379.00 billion in 2022, according to Investopedia's model.
ADB recently revised its growth estimate for the Philippines to a jump of 6.0% in 2022 — up from the bank's September forecast of 5.5% in 2022.
“The Philippine economy has shown impressive resilience,” stated ADB Philippines Country Director Kelly Bird in a report.