Philippine economy seen to grow up to 8%

MANILA, Philippines — After suffering the worst contraction in decades last year, the Philippine economy is expected to grow by as much as eight percent this year, well above government targets, according to Oxford Economics.

Oxford Economics’ latest growth projection for the Philippine economy was an upward revision from its previous growth target of 7.7 percent.

The economy contracted by a record 9.5 percent last year,  buckling under the stress of a prolonged pandemic lockdown, as well as various natural calamities.

The government expects the economy to expand from 6.5 to 7.5 percent this year.

Among the emerging markets, the Philippines is among those countries that may see significant growth this year following India’s 11.8 percent and China’s 8.9 percent.

Among ASEAN countries, the Philippines’ economic expansion is expected to be higher than that of Malaysia’s 5.5 percent, Indonesia’s 4.7 percent and Thailand’s four percent.

“This year has got off to a slow start for most emerging markets, with containment measures tightened to curb the spread of the virus. Meanwhile, the vaccine rollout has progressed well in only a few countries,” Oxford Economics said.

“But with domestic restrictions expected to ease gradually and the external backdrop improving, our baseline continues to see a stronger rebound in the second half,” it said.

By 2022, however, Philippine GDP is seen slowing to 7.3 percent. The growth will further ease to 6.3 percent and six percent by 2023 and 2024, respectively.

“Near-term recovery prospects remain uncertain as COVID-19-related restrictions disrupt activity. Many countries are struggling to keep infection rates under control, while vaccination progress has been hampered by supply constraints,” Oxford Economics said.

The think tank said that with food prices rising and currencies weakening, central banks in emerging markets would become more concerned about inflation risks.