Philippine economy's return to pre-pandemic levels seen at end of 2022, early 2023 —NEDA

The Philippine economy's return to pre-COVID-19 pandemic levels is expected late next year at the earliest, according to estimates by the National Economic and Development Authority (NEDA).

During the House Committee on Appropriations’ deliberations on the proposed P5.024-trillion national budget for 2022, Socioeconomic Planning Secretary and NEDA chief Karl Kendrick Chua said the recovery prospects for 2021 remain encouraging.

“[This] will allow us to recover to pre-pandemic levels some time at the end of 2022, if not early 2023,” Chua said.

“This will also help prevent long-term scarring and productivity losses,” he added.

The country’s gross domestic product (GDP) grew 11.8% in the April to June 2021 period, its highest quarterly reading in 32 years owed largely to “low base effect” since the comparable period in 2020 was at -16.9%.

The second quarter of 2020 was a period when most of the economy was shut down due to the imposition of enhanced community quarantine (ECQ) to arrest the spread of COVID-19.

While the exit from the pandemic-induced recession is a welcome development, the Philippine economy is still far from reaching the growth levels in 2019, before the COVID-19 crisis.

“The first half GDP at constant prices is estimated at P8.9 trillion. This is higher by 3.7% versus the first half of 2020 estimated at about P8.6 trillion,” National Statistician Claire Dennis Mapa said.

“Pre-pandemic, 2019, the first half of 2019 at constant prices is P9.4 trillion, and the P8.9 trillion first half of 2021 is lower by 6% compared to first half of 2019,” he added.

The Duterte administration’s economic managers earlier trimmed further their economic growth projection for 2021 due to the reimposition of stricter quarantine measures in light of the threat of the highly contagious Delta coronavirus variant. 

The Development Budget Coordination Committee (DBCC) revised its growth assumptions for 2021 from the 6% to 7% range to 4% to 5% “in light of the reimposition of stricter mobility restrictions in various areas of the country to effectively address the heightened risks brought about by the COVID-19 Delta variant.”

Banking on the pace of the government’s vaccination rollout, the economic team retained its growth targets for 2022 at 7% to 9%, and for 2023 and 2024 at 6% to 7%.

Chua said the enablers of the country’s economic recovery are hinged on the acceleration of the vaccination program, safe re-opening of the economy while strictly adhering to health protocols, and full implementation of recovery packages such as the 2021 budget, Corporate Recovery and Tax Incentives for Enterprises Act (CREATE), and Financial Institutions Strategic Transfer (FIST) law. —KBK, GMA News