The Philippines’s strong macroeconomic fundamentals continue to shield the economy from the ill effects of the Taal Volcano eruption and the coronavirus 2019 (Covid-19) pandemic, according to the National Economic and Development Authority (Neda).
In a television interview on Wednesday, Socioeconomic Planning Secretary Karl Kendrick T. Chua said the economy, which has been growing at 6 percent, is equipped to handle the recent crises.
There were also fewer poor Filipinos to protect given that the latest data showed the number of poor Filipinos already declined by 6 million.
“Actually, we are coming into the crisis with a strong economy. As of 2019, going into 2020, our growth rate is averaging 6 percent when other economies are slowing,” Chua said in a mix of Tagalog and English.
“In 2018, when the poverty incidence data was released, it showed poverty plunged from 23 percent to 17 percent. So we were already able to realize our promise of lifting 6 million Filipinos out of poverty by 2022 earlier,” he added.
On top of this, Chua said the latest data from the Philippine Statistics Authority (PSA) showed the country’s revised and rebased National Income Accounts (NIA) bodes well for the dream of becoming an upper middle-income country (UMIC) either this year, or next year.
Currently, the Philippines is classified by the World Bank as a lower middle-income country with a per capita gross national income (GNI) of between $1,026 and $3,995 using 2018 data.
An upper middle-income economy is classified as those countries with a GNI per capita of between $3,996 and $12,375, according to World Bank data.
“PSA released the revised and rebased GDP last week, showing that [the] economy grew more than originally measured. This is likely to make [the] Philippines [a] UMIC. We [will] wait for [the] World Bank to confirm,” Chua told the BusinessMirror.
With this, Chua said the government has been able to extend help to people affected by the Taal Volcano eruption in January 2020.
The economy’s robust growth also enabled the country to weather any slowdown in tourism and trade in the first few months of the year. This was largely due to the slowdown in the Chinese economy, which was already battling the coronavirus at the time.
Further, Chua said through the gains in the economy, the government was able to extend assistance during the Covid-19 pandemic.
Initially the government set aside P27 billion for the tourism sector followed by a P205-billion social amelioration package under the Bayanihan We Heal As One Act.
The new law also provided for a P51 billion worth wage subsidy for employees of micro, small and medium enterprises (MSMEs) who may have been negatively affected by the pandemic.
This, Chua said, is on top of other regular social programs of the government such as the Conditional Cash Transfer program, pension for seniors, and rice subsidy program, to name a few.
“This is because of the good handling of our economy starting from previous administrations. That’s the first thing we have to remember. When it comes to Covid-19, this is a problem of countries all over the world, no one is exempted from this. But what is good about this is that we are coming from a stable and strong economy,” Chua said in the vernacular.
Last week, PSA said the Philippines economic performance in the past 10 years showed an improvement by averaging 6.38 percent using a 2018-based national income accounts computation versus 6.3 percent using 2000-based data.
National Statistician Claire Dennis S. Mapa told BusinessMirror that while real gross domestic product (GDP) growth rates are not that different compared to the 2000-based estimates but in terms of growth rates, the differences were more pronounced.
With the rebasing and the ongoing Covid-19 pandemic, Mapa said GDP growth estimates for the first quarter will significantly be affected.
The PSA maintains that it will be able to release the first quarter GDP figures on May 7. The estimates will already use 2018 prices.