AMID RISING OIL PRICES

Philippines still on-track to pre-pandemic recovery —NEDA

The National Economic and Development Authority (NEDA) is confident that the Philippine economy will recover to its pre-COVID-19 pandemic level this year despite the ongoing Russia-Ukraine war which causes global uncertainty and oil prices to skyrocket.

At a virtual press briefing on Tuesday, Socioeconomic Planning Secretary and NEDA chief Karl Kendrick Chua said that the economy has “made significant progress in the past months in our fight against COVID-19.”

The country’s chief economist noted that the recent shift of the National Capital Region and several areas of the country to Alert Level 1 is estimated to generate an additional P9.4 billion per week of economic activity.

With this, Chua said, “Despite ongoing global tensions, we remain confident that the economy will recover to  pre-pandemic levels within the year.”

In 2021, the economy as measured by gross domestic product (GDP) —the total value of goods and services produced in a specific period— grew 5.6% from a contraction of 9.6% in 2020.

“As of the end of 2021, I believe we are P100 billion short of reaching pre-pandemic level,” Chua said.

“So, I still believe, in the first quarter, we will exceed the 2019 level,” he said.

In peso terms, the Philippines’ GDP stood at P19.387 trillion, over P100 billion short of the pre-pandemic or full-year 2019 level at P19.518 trillion.

Chua reiterated that shifting the entire country to Alert Level 1 will add P16 billion per week to the economy.

Another P12 billion per week will be added to productivity if “we can open all face-to-face schooling,” he said.

“We have a very strong potential to grow on the domestic front. Unfortunately, we are facing global headwinds to our economy. We believe we have a very strong economy that will withstand that,” Chua said.

“We also believe that the current global tension is temporary in nature. It will affect some people and some sectors and we are ready to support the affected sectors,” he added.

The NEDA chief said that there are “four channels” or areas where the economy can be affected by the Russia-Ukraine situation.

“Our base model is that this is a temporary situation. It will hit us in four areas —commodity prices, financial markets, trade, and overall confidence,” Chua said.

“The magnitude depends on how long this crisis will take,” he said.

“There is still a lot more that can be done from the domestic side, where we have control, to cushion any risk coming from the global side,” he added.

The NEDA chief said the government is open to supporting affected sectors through targeted subsidies “so long as the prices of fuel remain very elevated.”

The economic managers increased the fuel subsidy for the PUV sector to P5 billion from P2.5 billion to further ease the impact of skyrocketing oil prices aggravated by the Ukraine-Russia war.

The economic team also pushed to increase the fuel vouchers for agricultural producers to P1.1 billion from P500 million.

The Department of Budget and Management, last week, released the P2.5 billion as well as the P500 million for the fuel subsidies of the PUV and agriculture sectors, respectively.

The second tranche or the additional amount for fuel subsidies are targeted for release in April.—AOL,GMA News