"Month after month, quarter after quarter"
As the new year goes into its second month, economists and business analysts are coming forward with statements of how they think it is going to turn out from the standpoint of the coronavirus-battered Philippine economy. Everyone is agreed that the economy of 2021 will be a year of recovery from 2020’s horrendous 9.5-percent GDP (gross domestic product) contraction.
The range of the forecasts for the growth of this country’s 2021 GDP is surprisingly wide. The range is from 3.5 percent to 9 percent. Considering (1) that this country’s No.1 GDP source remains under lockdown, (2) that the likely start of an honest-to-goodness recovery will be no earlier than around mid-year and (3) that a climate of fear and uncertainty continues to prevail among Filipinos, especially consumers, one would have thought that almost all of forecasters would cluster around the low end of the range. This has not been the case, and a few economists and business analysts apparently believe that the Philippines economy will likely go changing toward GDP growth rates in excess of 6 percent in 2021.
As it moves into the second quarter of 2021, the economy remains in a fragile state with the exception of a handful of industries – chiefly export-oriented industries and activities that can be expected to thrive in a lockdown such as online transactions and deliveries – the hub of the Philippine economy remains under lockdown, and the government still is not showing signs of coming to grips with the COVID-19 virus. Most of the Filipino people, unemployed or underemployed and living from day to day, are unable to make a robust contribution to the revival of the economy. The strong likelihood, absent a massive fiscal stimulus from the government, 2021’s first quarter will end pretty much the way it started and that the economic anemia will carry over into the year’s second quarter.
If the astonishing forecast of 9 percent GDP growth in 2021 – or even the government’s tenaciously maintained 6.5-to-7.5 percent growth – is to come close to hitting the target, there should already be some signs, some stirring of incipient change in the near-term economic prospects. Perhaps those first signs, those stirrings, will start to be felt as the economy moves into the year’s second quarter. That could well happen; one fervently hopes that it will.
The point that is sought to be made here is that a forecast of 9-percent GDP growth – or even of a “programmed” 6.5-to-7.5 percent GDP growth doesn’t happen just like that. It will not become plausible because of a belief that, having taken such a beating in 2020, the Philippine economy will come back with a vengeance this year.
Normally a recovery must be the result of a steady upward momentum – month after month, quarter after quarter – of economic revival, with the economy displaying increasing signs that things have started to fall into place and that it is truly headed in a sustained upward direction.
2021 is going to be a year of comeback for the Philippine economy, but the recovery is going to be consistent with the capacity and of will and economy that has just undergone a 9.5-percent GDP contraction. The economy is not going to behave like a yo-yo.
