Back in business



The Manila Times


WE imagine that the outgoing administration’s economic team — Finance Secretary Carlos Dominguez 3rd, Socioeconomic Planning Secretary Karl Chua, and Budget and Management OIC Tina Canda — were feeling more than a little gleeful when they presented a joint statement on the Philippines’ first quarter economic performance on Thursday morning. And well they should have; the gross domestic product (GDP) growth figures for the first quarter exceeded even the most optimistic forecasts. Despite the lingering Covid-19 pandemic and a host of other challenges, the economy is, if not quite firmly back at its pre-pandemic level yet, clearly back in business. As we explained in an editorial earlier this week, because of the election period and the winding down of the Duterte administration’s time sort“The in office in the second quarter (April through June) of the year, the first quarter GDP result is the last that can be firmly attributed to the outgoing government. It also serves as a of starting point for the incoming administration, the benchmark from which the new government’s success or failure in managing the economy will be measured. Year-on-year GDP growth in Q1 was 8.3 percent, exceeding both the highest forecasts of analysts at 7 percent, and landing squarely in the middle of the government’s optimistic 7-to-9 percent growth range for this year. The unexpectedly high growth figure, coming as it does at the end of both the Duterte term and — we hope — the Covid-19 pandemic is an endorsement of the administration’s management of the pandemic. The economy suffered a massive downturn, in fact one of the worst in the world, at the height of the pandemic, and yet has climbed back to almost the level it was in 2019. True, the current growth was helped substantially by a low base effect, as the economy contracted by 3.9 percent in Q1 2021, but in this instance the comparison with the previous quarter — the last three months of 2021 — is more revealing. On a quarterly basis, the economy grew by 1.9 percent, which is a reversal of the pattern in normal years. First-quarter GDP is almost always lower than that of the fourth quarter preceding, due to the post-holiday slowdown in spending. That was not the case this year, as the government further opened the country to allow the economy to catch up.