DESPITE the effects of the pandemic and the Russia-Ukraine war, the Philippine economy is projected to grow by 6 to 6.5 percent this year, economists said on Wednesday.

Dr. Victor Abola, University of Asia and the Pacific (UA&P) director for Strategic Business Economics Program, said the country’s gross domestic product (GDP) is forecast to grow by 6 percent this year but noted that inflation will continue to be above the government’s 2- to 4-percent target driven by the continued increase in oil prices.

“We expect faster growth in 2022 and inflation to be above target but should go back to within target the following year,” said Abola during the 2022 Midyear Business Economic Briefing organized by the Business Economics Club and the UA&P.

“GDP growth rate [projection is] at 6 percent led by the industry sector. The services sector is still catching up because of the pandemic,” he added.

His projection is higher than the 5.7-percent economic growth recorded last year. It also falls at the lower end of the government’s 6- to 8-percent growth target for the year.

Inflation, meanwhile, is expected to settle at 5 percent this year, 4 percent in 2023 and to 3 percent levels in 2024.

Abola said that despite the

effects of the pandemic and the Russia-Ukraine war, the economy can better face the headwinds because it is in a “better economic situation than in the past crisis.”

ING Manila senior economist Nicholas Mapa, for his part, also agreed that economic growth outlook “still look very positive” but also noted that inflation will continue to be elevated in the near term.

“I’m actually a little more optimistic about a 6 to 6.5 percent [growth in 2022],” he said, adding that the economy has the ability to really expand as long as Covid cases are under control.

Mapa said, however, that inflation is expected to average 5.5 percent this year.

“We see inflation really kicking up higher and because of that the BSP will have to increase interest rates,” he said.

Mapa said the BSP is expected to raise policy rates by another 100 basis points this year, bringing the policy rate to 3.50 percent by the end of 2022.

UA&P Center for Research and Communication Research Director Bernardo Villegas, meanwhile, highlighted that moving forward, the next administration should put more focus on the agriculture sector.

Villegas said President-elect Ferdinand “Bongbong” Marcos Jr. should focus on attaining food security, consolidating farms fragmented by the agrarian reform without taking away the ownership from small farmers, and digitalization of the supply chain in agribusiness.

Aside from these, Villegas also cited the need for the full resumption of face-to-face classes to help the economy grow at a higher rate.

“We have to go back to faceto-face classes. And, in fact, that would be one way to attain an 8-percent growth rate this year, and the 6 to 7 percent that is more conservatively projected for 2023 and beyond,” he said.