Managing risks from the pandemic is the key to sustaining the economic growth this year, following the strong expansion in the second half of 2022, the Department of Finance said Wednesday.
“The robust growth figures in the final two-quarters of 2021 point towards continued economic recovery. This momentum needs to be sustained even in the face of the continued threat from the virus and its variants. The country needs to continue managing the risks, either through pharmaceutical or non-pharmaceutical means,” the agency said in a statement.
Data showed that the gross domestic product grew by 7.7 percent in the fourth quarter of 2021, bringing the full-year growth to 5.6 percent, beating private-sector expectations and exceeding the government’s target of 5 percent to 5.5 percent.
The DOF said more economic reforms would also support the growth momentum such as the recent approval of the amendments to the Retail Trade Liberalization Act.
“We continue working with Congress to amend Public Service Act and Foreign Investments Act. These game-changing economic reforms, together with the ongoing infrastructure program and CREATE, will have formed an economic recovery cocktail that can deliver a big shot in the arm of the Philippine economy. This will continue the investment-led growth, generate more employment, and, possibly, increase real wages,” it said.
Meanwhile, Bangko Sentral ng Pilipinas Governor Benjamin Diokno, chair of the Financial Stability Coordination Council, said while financial markets ended 2021 “healthier” compared to a year ago, risks remained amid the continued presence of the COVID-19 pandemic.
“Taken collectively, we are ending 2021 with a much healthier market than the one we saw in 2020. But things do not end there because we still have to be concerned with speed bumps in 2022,” the council said in its second semester 2021 financial stability report.
“If we go by the Spanish flu, the pandemic itself took three years but regular flu vaccines did not become routine until three decades after. From what we have seen, the economy will get back to 2019 country income by 2022, the third year of the pandemic,” it said.
“There are still costs from the pandemic and recouping these [at the aggregate] will depend on future GDP growth rates. Assuming a 5-percent real growth for 2021 and 7 percent thereafter, the point of recovering lost incomes takes us to fourth quarter 2023,” it said.
The council said the Omicron variant added a “further wrinkle” and how this new variant panned out remained to be seen.
Diokno said for financial authorities, “we welcome these gains, humbly recognizing that there will always be improvements we can pursue while maintaining a watchful eye over changing market conditions.”
“Now that we have our growth momentum back, we can pause, to take the opportunity to learn from this crisis,” Diokno said.