With the country’s local output measured in gross domestic product (GDP) already within the government’s revised 4 to 5 percent target for the year, attaining such can be considered as an easy task.
A sitting duck — as the idiom goes — but such a feat took a careful balancing act, with the government addressing both Covid-19 and non-Covid-19 concerns simultaneously.
Following the Philippine Statistics Authority’s (PSA) upward adjustments on both the first and second quarter GDP data, the year-to-date average now sits at five percent, hitting the upper end of the state’s target.
The PSA earlier revised its first and second quarter GDP estimates to minus 3.9 and 12 percent, respectively, better than the previous minus 4.2 and 11.8 percent.
In addition, economic performance in the third quarter of 2021 surpassed expectations with a strong 7.1 percent print, notably higher than the minus 11.6 percent in the same quarter year-ago.
National Statistician Claire Dennis Mapa said earlier this week the economy needs to grow by at least 1.7 percent in the fourth quarter for the government to accomplish the lower of its target, while a 5.3 percent expansion is required for the higher end of the same.
While such could be considered an easy target amid the continued easing in mobility restrictions, along with the renewed confidence both among households and firms, Mapa said the current GDP data sits slightly below the country’s growth level prior to the pandemic.
“GDP in real terms for the first nine months of 2021 is about P13.32 trillion. This is higher by 4.9 percent versus the first nine months of 2020, which is P12.7 trillion,” the PSA chief explained.
“Now for the first nine months of 2019, our GDP was estimated to be about P14.1 trillion. So, comparing our nine months 2021 performance versus the pre-pandemic of 2019, we are still down by about 5.7 percent,” he added.
Socioeconomic Planning Secretary Karl Kendrick Chua said a revision in the GDP target is highly unlikely despite the year-to-date average sitting at the upper end of the range.
Likewise, Chua expressed his confidence that the local economy could even exceed the upper end of the growth target for 2021 as long as “there are no unexpected new risks.”
Bangko Sentral ng Pilipinas Governor Benjamin Diokno shared the same sentiment as he noted the latest GDP data exceeded their 6.2 percent outlook.
“It is higher than the average of analysts’ expectations. In fact, on a quarter-on-quarter seasonally-adjusted basis, the economy grew 3.8 percent, a turnaround from a contraction of 1.4 percent in the previous quarter,” Diokno said.
“This positive development clusters our confidence that we will attain the growth target of 4 to 5 percent this year and 7 to 9 percent next year,” he added.
With this recent development, Fitch Solutions decided to revise its GDP forecast for the Philippines to 4.5 percent for 2021 from the previous 4.2 percent.
Nevertheless, the think tank said the country remains vulnerable to Covid-19 outbreaks amid disparities in regional vaccine rollouts and lower efficacy rates of the administered shots.
Moody’s Analytics also looks at adjusting its own projection, as it considered the latest GDP performance a surprise development amid the recorded infection surge in Metro Manila.
“We will consider a small upwards revision to our 4 percent GDP growth forecast for 2021,” Moody’s said.
“Our view of 2022 is also more positive. We expect to revise our 5.9 percent growth estimate for next year in our December forecast,” it added.