Dominguez optimistic GDP to grow 4-5% in 2021

Finance Secretary Carlos Dominguez III on Friday expressed optimism that the government’s economic growth target for 2021 will be achieved. 

“After so many challenging months, the numbers are now all in our favor,” Domingez said during the virtual Philippine Economic Briefing.

The Finance chief emphasized that the country’s third quarter growth exceeded forecasts.

The economy, as measured by gross domestic product (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 downwardly revised target band of 4% to 5% for the entire 2021.

With this, Dominguez said, “There is now a greater likelihood that our full-year growth will hit the higher end of our 4% to 5% GDP target for this year.”

The Cabinet official noted that total investments increased by 22% in the third quarter of 2021, driven by public construction. 

“The government’s decision to allow all construction activities to resume regardless of the area’s quarantine status must be credited for this very strong performance,” he said.
 
“Meanwhile, net foreign direct investments rebounded by 40% in the first eight months of 2021,” he added.

Likewise, remittance inflows from overseas Filipino workers continue to increase significantly. 

“From January to September of this year, overseas Filipinos’ cash remittances grew year on year by 6%. As a reflection of these, our gross international reserves increased to $108 billion by the end of October, equivalent to 10.8 months worth of import cover,” Dominguez said.
 
“Our international reserves even exceeded our total external debt obligations of $101.2 billion as of the end of August of this year. During this period, our external debt to GDP ratio actually declined to 26.5% from 27.2% in 2020,” he said.

Despite the two straight quarters of positive GDP growth, the economy is still 5.7% short of the levels seen before the COVID-19 pandemic hit the country. 

In peso terms, the first nine months of 2021 GDP was estimated at P13.32 trillion. This was lower than the P14.1 trillion economic output recorded in the same period in 2019.

Socioeconomic Planning Secretary Karl Kendrick Chua said it is possible for the economy to return to pre-pandemic levels by the first quarter of 2022.

Chua said that if the economy can perform at the same level as in the third quarter, "we can expect an even better performance in the fourth quarter."

The National Economic and Development Authority (NEDA) chief echoed Dominguez’s statement as he said that latest economic figures are “encouraging” and the country could hit the 5% growth target for this year.

“With brightening prospects for the economy, we expect to do even better in the fourth quarter as we continue to relax mobility restrictions,” Dominguez said.
 
“We will continue easing restrictions as our infection rates continue their steep decline and we are able to vaccinate more people. From a peak of more than 21,000 daily cases on September 15, these fell to just about 1,100 as of November 24,” he added.

Dominguez said the country’s running total of vaccine supply has already reached 139.4 million doses and “we have successfully administered 79.6 million shots” as of November 25.

“A total of 35 million Filipinos are now fully vaccinated. The numbers will improve rapidly as we continue to vaccinate about one million people daily,” he said.
 
“From November 29 to December 1, we will conduct a three-day national vaccination campaign against COVID-19 where we target to inoculate 15 million individuals nationwide.” — VBL, GMA News