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Philippines: Pre-pandemic GDP seen by next year
The Philippine economy will likely be back to its pre-pandemic level next year but further lockdowns could delay the recovery to 2023, an economist from Rizal Commercial Banking Corporation (RCBC) said.
“We’re estimating a return to pre-Covid levels for the economy by the latter part of next year,” Ricafort said in a briefing on Monday.
Ricafort said that the 4-to 5-percent economic growth that RCBC is projecting this year would be about 94- to 95-percent pre-Covid levels for the whole economy.
“Hopefully by next year a growth of at least 6 percent that we are estimating during the next year, we will be back already to the pre-Covid levels,” he said.
In the second quarter of the year, the country’s gross domestic product grew by more than 11 percent after five consecutive quarters of decline.
National Statistician Claire Dennis Mapa earlier disclosed that while the economy grew by 11.8 percent, the first-half GDP at constant prices, which is at P8.9 trillion, but is still down by 6 percent from the pre-pandemic level of P9.4 trillion in the first half of 2019.
While the economy is poised to recover next year, Ricafort noted that certain industries like tourism, property, automobiles and other non-essentials would take longer to recover.
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The Philippine economy will likely be back to its pre-pandemic level next year but further lockdowns could delay the recovery to 2023, an economist from Rizal Commercial Banking Corporation (RCBC) said.
“We’re estimating a return to pre-Covid levels for the economy by the latter part of next year,” Ricafort said in a briefing on Monday.
Ricafort said that the 4-to 5-percent economic growth that RCBC is projecting this year would be about 94- to 95-percent pre-Covid levels for the whole economy.
“Hopefully by next year a growth of at least 6 percent that we are estimating during the next year, we will be back already to the pre-Covid levels,” he said.
In the second quarter of the year, the country’s gross domestic product grew by more than 11 percent after five consecutive quarters of decline.
National Statistician Claire Dennis Mapa earlier disclosed that while the economy grew by 11.8 percent, the first-half GDP at constant prices, which is at P8.9 trillion, but is still down by 6 percent from the pre-pandemic level of P9.4 trillion in the first half of 2019.
While the economy is poised to recover next year, Ricafort noted that certain industries like tourism, property, automobiles and other non-essentials would take longer to recover.
“Normally it takes about two to three years for them to pick up the pieces and for businesses to recover the losses, as well as those who lost their jobs locally in order to recover what they have lost,” said Ricafort.
According to Ricafort, major pillars of economic recovery include measures to further reopen the economy, increased arrivals and rollouts of Covid-19 vaccines, and reduction in new cases.
“The most important catalyst would be the vaccination program,” said Ricafort.
He pointed out that the vaccination program would determine recovery prospects.
“After that eventually will be herd immunity target. That will be achieved as early as early next year, around February or March,” said Ricafort.
Ricafort said other drivers of growth include increased infrastructure and government spending in preparation for the 2022 elections and the accommodative monetary policy stance to help support economic recovery prospects amid limited government funds for additional stimulus measures.
Ricafort said that the Bangko Sentral ng Pilipinas (BSP) is expected to keep policy rates on hold to provide greater support for the economy.
He said, however, that there’s a possibility for the BSP to cut large banks’ reserve requirement ratio.
“The BSP hasn’t cut [RRR] this year but they need to cut at an average of 100 to 200 basis points per year in order to achieve the single-digit RRR by June of 2023 in order to better align with the region since we have already entered the Asean Banking Integration Framework,” said Ricafort.
Source: https://www.manilatimes.net/2021/08/17/business/top-business/pre-pandemic-gdp-seen-by-next-year/1811208