Manila: The Philippine economy is expected to return to its 6 per cent to 7 per cent growth trajectory in 2022 after nearly two years of grappling with the pandemic, despite the threat of the Omicron variant, according to the investment banking arm of the Metrobank Group.
First Metro Investment Corporation (FMIC) stated this year’s economic growth will be driven by sustained domestic demand, easing inflation, election expenditures, and accelerated government spending on infrastructure projects, the Philippine News Agency reported.
“Notwithstanding the ongoing pandemic, and Omicron sparking the third wave of infections, we are still optimistic that Philippine growth will further accelerate and get back on its trajectory of 6-7 per cent in 2022,” FMIC president Jose Patricio Dumlao said in a virtual briefing Tuesday.
Economic experts attribute that to the the our vaccination rate of 50 percent. "The economy is able to function,” said FMIC head of research Cristina Ulang.
The Department of Health (DOH) on Monday reported 33,169 daily COVID-19 cases. Daily cases are lower at 28,007 on Tuesday, the agency stated.
Dumlao said the economy registered a 4.9 per cent growth in the first three quarters of 2021 and the growth momentum likely spilled over in the fourth quarter given further economic reopening and easing mobility restrictions.
He added business and consumer confidence are also cautiously positive given wider availability of vaccines and relaxation of lockdowns, quarantine measures, and mobility restrictions.
University of Asia and the Pacific (UA&P) economist Dr. Victor Abola said the 6 to 7 per cent gross domestic product (GDP) projection this year will be led by the industry sector - both construction and manufacturing.
Abola said services will still be the lagging sector as the pandemic measures hit hotels and restaurants.
“The Philippine situation is that there is recovery but still on the way to reach the pre-pandemic levels,” he said.
The country’s GDP posted a -9.5 per cent full-year growth rate in 2020 compared to its 5.9 per cent pre-pandemic performance in 2019.
Abola said the business process outsourcing (BPO) is a major contributor to the resiliency of the economy amid the pandemic.
“And it’s not the same as usual call centers, etc. You can see there are new, emerging segments and that is what companies are focusing on,” he said, citing insurance, life sciences, healthcare, and data analytics, among others.
Aside from BPO revenues, FMIC chairman Francisco Sebastian said the Overseas Filipino Workers (OFW) remittances are boosting the economy.
“These two things are not as sexy as other things like technology and telecoms… This is what is holding us up. OFW remittances continue to grow,” he said.