Duterte’s economic managers raise economic growth target for 2021 to 5%-5.5%

The Duterte administration’s economic team on Tuesday raised its growth target for 2021 amid the further relaxation of COVID-19 mobility restrictions.

JUST IN: The Duterte administration’s economic managers upgrade their economic growth target for 2021 to 5-5.5% from 4-5%. | @Ted_Cordero pic.twitter.com/6OD5QxRF13

— GMA News Breaking (@gmanewsbreaking) December 14, 2021

In a statement, Development Budget Coordination Committee (DBCC) —comprised of the chiefs of Budget and Management, Finance, and Socioeconomic Planning— said it revised its growth assumptions for 2021 from the 4% to 5% range to 5% to 5.5%.

The economic team cited the 7.1% gross domestic product (GDP) growth posted in the third quarter of this year “despite the imposition of stringent quarantines to contain the spread of the threat of the Delta variant.”

“As we continuously relax restrictions and increase mobility, economic performance is expected to accelerate further in the last quarter of the year,” the DBCC said.

“Hence, the growth assumption for 2021 was adjusted upwards to 5% to 5.5% while growth targets for the medium-term were retained at 7% to 9% for 2022 and at 6% to 7% percent by 2023 and 2024,” the economic managers said.

With our strong economic performance in 2021, the DBCC said it is optimistic that the country’s GDP will return to its pre-pandemic level by 2022.

The economy, as measured by GDP—the total value of goods and services produced in a country in a specific period—grew 7.1% in the third quarter, a reversal from a contraction of 11.4% in the same period last year, albeit lower compared to the 12% growth posted in the second quarter of 2021.

The July to September GDP print brought the year-to-date growth to 4.9%, within the upper end of the government’s previous target band of 4% to 5% for the entire 2021.

“Our accelerated vaccination drive has enabled the safe and targeted reopening of the economy. With 41.5 million Filipinos now fully vaccinated, we have seen COVID-19 cases and deaths fall sharply even as we relaxed restrictions in the last quarter of the year,” the DBCC said.

“This led to an additional employment of 1.3 million compared to the pre-pandemic level, above-target revenue collections, and a strong and early recovery,” the economic team added.

The economic team said the government crafted the 10-point policy agenda to shift the country from a pandemic to an endemic paradigm. 

The 10-point policy agenda covers the following areas: metrics; vaccination; healthcare capacity; economy and mobility; schooling; domestic travel; international travel; digital transformation; pandemic flexibility bill; and medium-term preparation for pandemic resilience.

“Through these strategies, we will sustain our recovery and restore our path to a rapid and inclusive growth,” the DBCC said.

Medium-term fiscal program

The DBCC, likewise, said the revenue projection for 2021 is expected to exceed the target and reach P3.027 trillion “due to increased economic activity and improved services of our revenue agencies arising from their digitalization projects.”

“This strong revenue collection performance is seen to continuously improve with revenues returning to pre-pandemic levels at P3.304 trillion in 2022, P3.624 trillion in 2023,and P4.049 trillion in 2024,” the economic managers said.

Meanwhile, full year disbursements for this year are expected to reach P4.633 trillion, which is 9.6% higher year-on-year.

“This is mainly attributed to the accelerated spending performance seen in infrastructure and other capital outlays, personnel services, transfers to local government units (LGUs), and equity and interest payments,” the DBCC said.

For 2022, total disbursement program was maintained at P4.955 trillion.

“On the other hand, consistent with the aforementioned higher revenue estimates, disbursement levels for 2023 and 2024 were slightly adjusted upwards to P5.059 trillion and P5.347 trillion, respectively,” the economic managers said.

“Given the higher-than-target revenues and lower-than-programmed disbursements for 2021, the deficit program for this year is estimated at a lower level of 8.2% of GDP,” the DBCC said.

The economic managers assured that while the threat of new COVID-19 variants may persist in the short-term, the Philippines is now in a much stronger position to manage possible spikes in cases and safely reopen the economy to Alert Level 1 in January 2022.

“Our effective management of COVID-19 will solidify our recovery and sustain our growth beyond this pandemic,” the economic team said.—AOL, GMA News