Economy to fall short of government targets – UN

MANILA, Philippines — The Philippine economy will likely fall short in achieving government targets this year as the country continues to face challenges worsened by the pandemic.

In the latest edition of the World Economic Situation and Prospects, the United Nations (UN) said the Philippines’ gross domestic product may grow by 5.5 percent this year from the estimated 4.9 percent in 2021.

Despite the improvement, the UN’s forecast is significantly lower than the government’s seven to nine percent target for 2022. However, it is above the 4.9 percent projection for the East Asian region.

By 2023, GDP growth is expected to jump to 7.7 percent, way above government forecasts of a six to seven percent growth.

In a briefing, the UN Economic and Social Commission for Asia Pacific (UNESCAP) said the Philippines’ moderate recovery, like all other countries in Southeast Asia, has been disrupted by the continued emergence of new COVID-19 variants.

“Going forward, they’ll be faced with a lot of rising challenges, which is similar to all other countries, such as global tightening or declining exports,” UNESCAP senior research assistant Kiatkanid Pongpanich said.

“The Philippines is still supported by stimulus measures and infrastructure programs. But the country is going to face a lot of challenges,” she said.

The UN’s flagship report said recovery of economies in the region is still in the early stages and that the resurgence of COVID-19 cases has disrupted prospects.

“More people in extreme poverty, a slow labor market recovery and rising climate risks will continue to inhibit progress on the 2030 Agenda for Sustainable Development,” the UN said.

“Weaker export demand, prolonged supply-side challenges, rising concerns around financial instability and the possibility of a sharper-than-expected slowdown in China’s economy, all amid a lingering pandemic with new variants, pose downside risks,” it said.

The UN emphasized that risks from accelerated global monetary tightening could increase volatility, trigger capital outflows and disrupt credit growth, especially in countries with elevated debt and large financing needs.

A possible sharper-than-expected slowdown in China and the unresolved trade tensions between China and the US could also constrain economic recovery.

The New York-based intergovernmental organization noted that containing the pandemic will remain a policy priority in the near term and that macroeconomic policies should remain accommodative and targeted to ensure an inclusive and sustainable recovery.