The Philippine economy continued its growth trajectory in the last three months of 2022, pushing the full-year gross domestic product (GDP) to exceed the government’s target ceiling, the Philippine Statistics Authority (PSA) reported on Thursday.
The economy, as measured by GDP or the total value of goods and services produced in a specific period, grew by 7.2% during the October to December 2022 period, albeit slower than the maintained 7.6% GDP growth in the third quarter.
This also compares with the 7.8% growth rate seen in the fourth quarter of 2021.
The last three months of 2022 economic growth exceeded the median analyst forecast of 6.8%.
In the region, the Philippines grew the fastest in the fourth quarter of last year, followed by Vietnam at 5.9% and China at 2.9%, according to National Economic and Development Authority (NEDA) Secretary Arsenio Balisacan.
Nevertheless, the fourth quarter GDP print brought the full-year economic growth to 7.6%.
This is above the government's target band of 6.5% to 7.5% for the entire 2022.
“This robust fourth-quarter growth implies a 7.6% full-year growth in 2022 that exceeds the Development Budget Coordination Committee’s target of 6.5 to 7.5% for the year,” Balisacan said at a press briefing.
For his part, PSA chief and National Statistician Claire Dennis Mapa said, “The 7.6% growth rate for full-year 2022 is the highest since 1976 under the 2018 base year.”
“That time in 1976, the GDP growth was recorded at 8.8%,” Mapa said.
The PSA chief said the main contributors to the fourth quarter 2022 GDP growth were wholesale and retail trade; repair of motor vehicles and motorcycles, which grew 8.7%; financial and insurance activities, up 9.8%; and manufacturing, up 4.2%.
For the full-year 2022, the sectors which contributed to the economic performance were wholesale and retail trade; repair of motor vehicles and motorcycles, up 8.7%; manufacturing, 5%; and construction, up 12.7%.
The PSA chief said that the industry and services sectors also saw a “positive” growth rate of 4.8% and 9.8%, respectively, in the fourth quarter of 2022.
Agriculture, forestry, and fishing (AFF), however, posted a contraction of -0.3% during the same period.
On a full-year basis, AFF, industry, and services all posted positive growths with 0.5%, 6.7%, and 9.2%, respectively.
On the demand side, Mapa said Household Final Consumption Expenditure (HFCE) grew by 7% in the fourth quarter of 2022, while Government Final Consumption Expenditure (GFCE) went up by 3.3%.
Likewise, gross capital formation saw a 5.9% increase, while exports of goods and services grew 14.6% and imports of goods and services rose 5.9%.
These were other sources of growth for the fourth quarter, according to Mapa.
For the entire 2022, HFCE grew by 8.3%; GFCE rose by 5%; gross capital formation, 16.8%; exports of goods and services, 10.7%; and imports of goods and services, 13.1%.
“Our robust performance in the fourth quarter reflected strong domestic demand, with three-fourths contributed by household consumption and almost a fifth by investment,” Balisacan said.
“The improvements in labor market conditions, increased tourism, ‘revenge’ and holiday spending, and resumption of face-to-face classes supported growth in the quarter, further reflecting a solid rebound in consumer and investor confidence in the economy,” he added.
Balisacan said the “economic growth came with more jobs” as the country’s unemployment rate went down to 4.2% in November 2022 from 6.5% in the same period in 2021.
“This performance marks our lowest unemployment rate since 2005. We also observed an improvement in the quality of employment relative to the same period last year, as more workers found remunerative and stable work in private establishments and became employed in full-time jobs,” the NEDA chief said.
According to the Presidential Communications Office, President Ferdinand "Bongbong" Marcos Jr.’s good economic stewardship resulted in the country posting 7.6% full-year growth in 2022.
“The administration’s improved COVID-19 risk management and the easing of mobility restrictions have created a positive economic outlook, boosting economic activity and creating more jobs despite external headwinds,” the PCO said.
Balisacan said the government will continue to support consumers and affected sectors through the extension of reduced tariffs on various products, facilitation of an accessible food supply chain, reduction of transport and logistics costs, and other measures to cushion the impacts of inflation on the purchasing power of households.
“As global and domestic headwinds persist and keep commodity prices elevated, protecting the purchasing power of Filipinos and ensuring food security remain at the top of the government’s priorities,” he said.
Last month, Marcos signed Executive Order No. 10, which extended the reduced import rate duties on key commodities — pork, rice, corn, and coal — until December 31, 2023, to help provide diversified sources of food and agricultural inputs in the short term.
“More importantly, through the Philippine Development Plan (PDP) 2023-2028, we will ensure inclusive growth that creates more and better, green, or resilient jobs to enable Filipinos to improve their quality of life. Inclusive growth across the archipelago will be our vehicle for reducing poverty incidence from 18% of the population in 2021 to a single-digit level by 2028,” Balisacan said.
Senate Minority Leader Aquilino "Koko" Pimentel III also emphasized the importance of distributing the benefits of economic growth.
"GDP and the other economic figures are simply 'numbers' to the majority of our people. What is more important is the distribution of the benefits of economic growth to the people, especially the poor," he said in a text message.
"The improved economy should lead to more taxes paid by the rich, and then we should use this increase in tax revenue to invest in our people’s education, skills, and welfare and to increase investments in relevant public infrastructure," he added.
While the "better than expected" GDP growth for 2022 was a "very welcome development," Senator Sonny Angara said that more needs to be done to sustain the growth momentum.
"The 2022 growth data showed that it was buoyed by consumer spending. This is not ideal and sustainable," he said.
"Prices of goods remain high and this, coupled with the hit on household savings will have an impact on spending in the first quarter this year. We expect the administration to build on its gains and we in Congress will provide our support to its initiatives that will contribute to addressing inflation, creating jobs and pump priming the economy," he added.
Meanwhile, Senate President Juan Miguel Zubiri said the 7.6% full-year GDP growth was a remarkable success and proof that the pandemic recovery efforts are working.
“The challenge now is to prepare for the threat of a global recession. We need to make sure that our macroeconomic policies and fundamentals are kept in check to weather the possible effects of external headwinds that may come our way," he said in a statement.
“[I]nternally, we must work on cascading this GDP growth to the masses. For this growth to be a genuine triumph, it has to be felt in the lives of every Filipino, especially in terms of day-to-day expenses," he added.
The Senate chief also expressed hope that the upward trajectory of the GDP would be sustained in 2023.
"[W]ith the coordination between the [E]xecutive and the [L]egislative, we are committed to strengthening our economic measures and building on the gains that we have made so far. We also need to keep supporting the sectors that are still slowly recovering from the pandemic, such as trade, tourism, and transport," he said. — with Anna Felicia Bajo and Hana Bordey/KBK/RSJ/VBL, GMA Integrated News