The Philippine economy grew 7.1 percent in the third quarter of the year on the back of “careful balancing” by the government of Filipinos health and economic needs, according to the National Economic and Development Authority (Neda).
Philippine Statistics Authority (PSA) data showed GDP grew faster than the contraction of 11.6 percent in the July to September period last year but was slower compared to the 12 percent growth posted in the second quarter this year.
“With strong third-quarter growth and overall performance in 2021, we are on track to reach the high-end of our 4 to 5 percent growth target for 2021. Year-to-date growth is currently at 4.9 percent,” Socioeconomic Planning Secretary Karl Kendrick T. Chua said in a briefing on Tuesday.
The growth of the economy in the third quarter was within expectations of local economists who said that while GDP growth will be robust, it will not be near the 12 percent posted in the second quarter of the year. (See: https://businessmirror.com.ph/2021/11/03/factory-rebound-seen-to-boost-growth-in-q3/)
Below pre-pandemic growth
PSA data showed the country’s GDP in the third quarter reached P4.429 trillion. National Statistician Claire Dennis S. Mapa said this is P295.1 billion higher than the third quarter 2020 GDP but lower by P207.8 billion lower than the second quarter of 2021.
Data also showed that the country’s GDP amounted to P13.323 trillion in the January to September period. This means, Mapa said, the economy was still 5.7 percent below its pre-pandemic growth.
He said in 2019, GDP in the January to September period reached P14.125 trillion which was around P801.219 billion higher than the GDP in 2021 during the same period.
The country’s pre-pandemic GDP in 2019 was also P1.421 trillion higher than the P12.7 trillion posted in the same period of 2020.
“For 2019, the first 9 months of 2019, our GDP was estimated to be 14.1 trillion. So comparing our nine months 2021 performance, versus the pre-pandemic of 2019, we are still down by about 5.7 percent,” Mapa explained.
On track
Despite being below pre-pandemic level, Chua said GDP growth is on track to attain the high-end of the government’s GDP targets this year pegged at 4 to 5 percent by yearend.
Mapa said in order to attain the low-end of the government’s target, the country’s GDP only needs to register a growth of 1.7 percent in the last quarter of the year. To achieve the high-end of the target, the country needs a GDP growth of 5.3 percent.
“With strong third quarter growth and overall performance in 2021, we are on track to reach the high-end of our 4 to 5 percent growth target for 2021. Year-to-date growth is currently at 4.9 percent,” Chua said.
Chua said the remaining eight months of the Duterte administration will see the government working toward making the country resilient to Covid-19.
He said the government is bent on implementing policies that will ensure the economy returns to the “path of rapid and more inclusive growth.”
“It has been 20 months since the pandemic struck the country,” Chua said. “There were doubts and there were challenges in the first few months. But there was never a lack of resolve. We moved quickly to build up our health system and made provisions for massive vaccine procurement. With decisive leadership and a determined people, we are now reaping the results.”
Growth contributors
The PSA said the main contributors to the growth, with their corresponding increases, were: Wholesale and retail trade; repair of motor vehicles and motorcycles, 6.4 percent; Manufacturing, 6.3 percent; and Construction, 16.8 percent.
Among the major economic sectors, Industry and Services posted positive growths of 7.9 percent and 8.2 percent, respectively. Meanwhile, Agriculture, forestry, and fishing posted a contraction of -1.7 percent in the third quarter of 2021.
On the demand side, Household Final Consumption Expenditure (HFCE) grew by 7.1 percent in the third quarter of 2021. The following items also recorded growths: Gross Capital Formation (GCF), 22.0 percent; Government Final Consumption Expenditure (GFCE), 13.6 percent; Exports, 9.0 percent; and Imports, 13.2 percent.
Net Primary Income (NPl) from the Rest of the World declined by -52.3 percent. Meanwhile, the Gross National lncome (GNl) posted a growth of 2.8 percent during the period.