The economy recorded a strong expansion of 8.3 percent in the first quarter of the year despite the Omicron variant-induced surge in coronavirus disease 2019 cases earlier this year, the government reported yesterday.
The growth in the first quarter of the year is a significant reversal from the 3.8 percent contraction posted in the same period in 2021. It is also within the government’s full-year seven to nine percent growth target.
Karl Kendrick Chua, socioeconomic planning secretary, shared the economic team’s joint statement in a press briefing yesterday, as he said the growth in the first quarter exceeded the median analyst forecast of 6.7 percent, making the Philippines the fastest growing economy in the East Asia Region for the period.
He also said he will recommend to the Development Budget Coordination Committee to keep the full-year growth target.
2”The headwinds we faced were strong, but our quick rebound from the Omicron surge in January proved that we can live and deal with the virus. With our strengthened healthcare capacity and accelerated vaccination program, we were able to contain the surge and safely reopen the economy,” Chua said.
“On February 1, we shifted our economic centers to Alert Level 2. By the end of March, around 70 percent of the economy was placed in Alert Level 1. This quick turnaround in the first quarter shows that we can win both the economic and health battles,” he added.
Dennis Mapa, national statistician, said in the same press briefing that under current prices, the gross domestic product (GDP) in nominal terms is P4.9 trillion, already higher than the first quarter 2019 figure of P4.43 trillion and first quarter 2020 number of P4.45 trillion.
In terms of real GDP, Mapa said the first quarter 2022 number is about P4.618 trillion, 3.5 percent higher compared to the first quarter 2019 real GDP of P4.46 trillion.
“So both current and constant prices, we have already exceeded the pre-pandemic first level,” Mapa said.
Chua said other economic indicators support this strong recovery.
“Google mobility data improved further when we lowered the alert levels. Visits to the transit stations are now 30 percent higher than the pre-pandemic level, while visits to workplaces have also exceeded the pre-pandemic level by around 20 percent. The unemployment rate in March 2022 fell to 5.8 percent, the lowest since the start of the pandemic. Employment creation is now at 4.4 million above the pre-pandemic level,” Chua said.
“We have restored many jobs and livelihood by shifting to a more endemic mindset, accelerating vaccination and implementing granular lockdowns that only targeted the areas of highest risk while allowing the majority of our people to work and earn a living,” he added.
Other positive developments Chua cited include manufacturing, which saw a volume of production index growth of 336 percent in March 2022; external trade, with a growth rate of 18.6 percent last March; and remittances, which hit $2.8 billion in February of 2022.
Growth in the first quarter of 2022 was broad based as most sectors rebounded from their contractions in the same period last year.
On the production side, all sectors expanded, driven by industry and services at 10.4 percent and 8.6 percent, respectively. Meanwhile, agriculture slightly improved by 0.2 percent as growth was hindered by the African swine fever and elevated prices of agricultural commodities such as corn, pork and sugar.
On the expenditure side, growth was driven by private consumption which went up by 10.1 percent, a stark reversal from the 4.8 percent contraction in the same period last year.
With much relaxed quarantine restrictions and more vaccinated Filipinos, family activities, leisure, travel and tourism have all grown significantly, Chua said.
Other expenditure items, such as investments and external trade, also expanded.
Investments recorded a robust growth of 20 percent from -13.9 percent in 2021. Exports expanded by 10.3 percent, and imports grew by 15.6 percent.
In contrast, growth in government expenditure temporarily slowed down to 3.6 percent from 16.1 percent last year, as public construction contracted by 4.9 percent as the election spending ban began towards the end of the first quarter.
Chua said both of these are expected to accelerate in the second half of the year.
“Our strong economic performance moves us closer to achieving our growth target of 7 to 9 percent this year, but we will not rest on our laurels. We will continuously work hard to strengthen our domestic economy against heightened external risks such as the Russia-Ukraine conflict, China’s slowdown and monetary normalization in the United States,” Chua said.
“A significant piece missing in our recovery is the resumption of face-to-face schooling.
More than the foregone economic activity due to school closures, we are very much concerned about the learning loss and impact on future productivity of our children. We reiterate our call for the urgent resumption of face-to-face schooling plus a catch-up plan to regain lost learning in the past two years. This will help secure better opportunities for future generations and ensure that our demographic dividends will not be wasted,” he added.
Chua also said managing inflation remains as one of the top priorities.
“The economic team has recommended the extensions of Executive Orders 134 and 135 to expand our supply of pork and rice. The economic development cluster also recommended a temporary reduction of the most favored nation tariff rate for corn, a primary ingredient in animal feeds. All these will help ease inflationary pressures and stabilize food prices,” Chua said. With J. Montemayor
