MANILA – Officials of the National Task Force Recovery Cluster expect the Philippine economy is up for a long-term growth trajectory following the 9.5-percent contraction in 2020 amid the global health and economic crisis.
In an interview on the sidelines of the National Task Force cluster on economic recovery meeting with the Presidential Communications Operations Office (PCOO) Thursday, Department of Trade and Industry (DTI) Undersecretary Ceferino Rodolfo said the economic managers and leaders anticipate the path to the country’s recovery as “a marathon and not a sprint”.
“We’re here for the long term. We are prepared to run the marathon, but we are fast-tracking the enabling environment to support all of these,” he said.
Rodolfo said the government will make full use of its resources to achieve sustainable and long-term economic growth.
“In 2021, we see game-changers in terms of policy reforms,” he added.
Signs of recovery
The DTI official said there are signs the Philippine economy is recovering from the impacts of the coronavirus disease 2019 (Covid-19) pandemic.
Rodolfo said the country’s gross domestic product (GDP) declined by 16.9 percent in the second quarter of 2020 during the height of the lockdown, then the contraction narrowed to 11.4 percent in the third quarter, and recorded a slower decrement in the fourth quarter at 8.7 percent.
This means that the GDP is growing on a quarter-on-quarter basis, he added.
Data from the National Economic and Development Authority (NEDA) show between the second and third quarter last year, GDP grew by 8 percent. It also rose by 5.6 percent between the third and fourth quarter of 2020.
The unemployment rate also slowed down from the record-high 17.7-percent in April to 10 percent in July before posting a single-digit rate in October at 8.7 percent.
He also cited the United Nations Conference on Trade and Development (UNCTAD) report indicating the Philippines was able to grow its foreign direct investments (FDIs) by 29 percent to USD6.4 billion in 2020, “bucking the trend” of global FDI flows which dropped by 42 percent last year.
“The programs (to support growth) are already here, we just have to accelerate the implementation,” Rodolfo said.
Better prospects
NEDA Undersecretary Rosemarie Edillon also told the PNA the country’s strong macroeconomic fundamentals, pending legislations, and various reforms can drive economic growth in the long run.
“When you talk to the investors, what they are actually looking into is the long term growth prospects of the country. So in the case of the Philippines, we are actually confident that we have been very prudent with respect to managing this Covid-19 pandemic,” she said.
Edillon said the country’s external debt position remains healthy as it has not yet breached the 60 percent debt-to-gross domestic product (GDP) ratio.
This despite the government has infused social amelioration and implemented the Bayanihan 2 to counter the adverse impacts of the pandemic, she said.
“We have been very prudent. That is actually the reason why early this year, we maintained our credit rating because what they are looking there is going towards the long haul,” she added.
Edillon said the government is also fast-tracking its public investment programs under the Philippine Development Plan (PDP), such as digital transformation, free Wi-Fi in public places, a national identification system, and universal health care, among others.
“All the foundational reforms are already there and in addition, we are pushing for reforms to further improve the business climate,” she said.
Edillon cited pending legislations in Congress, such as the Corporate Recovery and Tax Incentives for Enterprises (CREATE) Act, Public Service Act, Retail Trade Liberalization Act, and Foreign Investments Act, which will help in attracting foreign investments.
“Going forward, we expect better growth prospects actually because we are matching it with fiscal prudence,” she added. (PNA)
