Economist Bernard Villegas of the University of Asia and the Pacific said the economy may grow up to 4 percent this year, lower than the government’s target of 6.5 to 7.5 percent, primarily due to the country’s dismal response to the coronavirus disease 2019 pandemic..
Contrasting economic recovery efforts to a 100-meter dash, Villegas said the Philippines is “going to be left behind” by its neighbors.
“We are not going to recover that quickly because we have not managed the pandemic very well in comparison with Singapore, and Vietnam. I don’t expect the GDP to exceed 4 percent,” Villegas said at yesterday’s Asia CEO Forum.
“In the first semester, we’ll continue to hit a lot of uncertainties. I don’t think we will have the priority in getting the vaccine because all vaccines will be widely available only in the last quarter of this year,” he added.
“I suggest that businesses continue to make use of 2021 to make necessary adjustments to the new reality that will be upon us by 2022,” Villegas said, adding that organizations should finetune their technology and digital shift, infrastructure and supply chains..
On the positive side, Villegas said inflation this year will remain tame at around 2 percent. Overseas Filipino remittances will rebound this year from a relatively flat 2020.
“The good news is remittances continue to be a source of our purchasing power. I am surprised that in 2020, despite 300,000 workers being forced to come back, the decline in remittances for the whole year is less than one percent. So we almost kept at the same level that remittance that we had in 2019. And I see that the area where we can be optimistic in 2021 is the rebound of overseas workers,” Villegas said.
Villegas said resources must be invested in revitalizing the agriculture sector, from farming, warehousing, post-harvest to cold storage.
“During the pandemic we realized how important food is. And that is where we must give the support to make sure that we are going to attain higher productivity and lower costs in all other areas of agribusiness,” he said.
This year, the agriculture sector is seen to grow 3 percent while food manufacturing will grow 10 to 12 percent.
“”Hopefully we can produce enough for our population of 120 million and have a surplus so, that we can compete with Vietnam, Thailand (and) Malaysia in supplying the biggest market for food — China,” he said.
Villegas also said the offshore and outsourcing business will continue to see better days ahead particularly with the change in leadership in the United States.