The Philippine Gross Domestic Product (GDP) posted a growth of 7.7 percent in the fourth quarter of 2021, resulting in 5.6 percent full-year growth in 2021, the Philippine Statistics Authority (PSA) said Thursday.
“The economy grew by 7.7 percent in fourth quarter and 5.6 percent in 2021, higher than the median forecast of 6.5 percent for fourth and 5.3 percent for full year 2021 made by 18 economists in a recent poll,” Bangko Sentral (BSP) Governor Benjamin Diokno said.
Using the nowcast methodology, BSP estimates that Q4 2021 could grow by 7.4 percent and implied full-year growth of 5.6 percent.
“The actual 2021 GDP growth of 5.6 percent represents a sharp recovery from the 9.6-percent contraction in 2020, but lower than the 6.1-percent expansion in 2019. It exceeds the government’s revised forecast range of 5 percent to 5.5 percent,” Diokno added.
Fourth quarter GDP growth is broad-based with all sectors growing: agriculture, 1.4 percent; industry, 9.5 percent; and services, 7.9 percent, he said.
However, the PSA posted that the main contributors to the fourth quarter 2021 growth were: Manufacturing, 7.2 percent; Wholesale and retail trade; repair of motor vehicles and motorcycles, 7.4 percent; and Construction, 18.5 percent.
The same industries also contributed the most to the annual growth: Manufacturing, 8.6 percent; Wholesale and retail trade; repair of motor vehicles and motorcycles, 4.3 percent; and Construction, 9.8 percent.
“Among the major economic sectors, Agriculture, forestry, and fishing, Industry and Services all posted positive growths in the fourth quarter with 1.4 percent, 9.5 percent, and 7.9 percent, respectively. On an annual basis, Industry and Services registered positive growths of 8.2 percent and 5.3 percent, respectively. Meanwhile, Agriculture, forestry, and fishing posted a contraction of -0.3 percent,” the PSA added.
On the demand side, Household Final Consumption Expenditure (HFCE) grew by 7.5 percent in the fourth quarter of 2021. The following items also recorded growths: Government Final Consumption Expenditure (GFCE), 7.4 percent; Gross Capital Formation (GCF), 12.6 percent; Exports, 8.3 percent; and Imports, 13.7 percent. On an annual basis, HFCE grew by 4.2 percent, GFCE, 7.0 percent; GCF, 19.0 percent; Exports, 7.8 percent; and Imports, 12.9 percent.
It also added that, Net Primary Income (NPl) from the Rest of the World grew by 15.0 percent bringing the Gross National Income (GNI) to grow by 8.0 percent in the fourth quarter of 2021. On an annual basis, NPl declined by -50.2 percent while GNI grew by 1.6 percent.
For his part, Michael Ricafort, chief economist, Rizal Commercial Banking Corp. told Daily Tribune:
“The Philippine economy re-opened further toward greater normalcy in fourth quarter 2021, especially since November 5, 2021 when Metro Manila was eased to Alert Level 2 (from 3), many businesses/industries allowed to operate at much higher capacity and some hard-hit businesses/industries since the Covid-19 pandemic in 2020 allowed to operate again and at higher
capacity as well, senior citizens and minor were finally allowed to go out of their homes after restricted in their homes for more than 1.5 years [since mid-March 2020].”
Domestic travel restrictions also further eased such as not requiring negative PCR tests upon the discretion of the local governments, thereby spurring local travel and tourism.”
Missing pieces of the recovery story, partly due to the Omicron variant concerns include the continued restrictions on foreign tourism and face-to-face schooling since the pandemic started in 2020.
“Furthermore, Alert Level System, adopted nationwide at Alert Level 2 from November-December 2021, a de facto measure to further re-open the economy with the shift to smaller scale/granular lockdowns at the house/street level [away from large scale lockdowns at the city/provincial/regional level in the past, so less drag on economic growth, going forward],” Ricafort added.
The country’s Q4 growth is also higher than most in Asean: Indonesia, Vietnam, Singapore, among others.
By Radee Sausa