THE International Monetary Fund (IMF) sees the Philippines returning to pre-pandemic growth. The bad news: It won’t happen until 2024.
The IMF said it expected the Philippines to return to pre-pandemic output levels next year and robust growth rates by 2024 as long as it implements more reforms facilitating economic recovery.
The IMF hiked its 2022 gross domestic product (GDP) growth forecast for the Philippines to 6.5 percent from 6.3 percent previously, even as the Washington-based multilateral lender took into account “some adverse spillovers from the virus resurgence in trading partners and the Ukraine-Russia crisis,” Gudmundsson said. The IMF’s updated growth expectations remained below the government’s 7 to 9 percent target.
While inflation faced upside risks from the ongoing surge in commodity and food prices partly due to Vladimir Putin’s campaign to destroy Ukraine, Gudmundsson said the headline rate would likely average 4 percent this year, or within the Bangko Sentral ng Pilipinas’ (BSP) target range of manageable price hikes conducive to economic growth.
The Philippines suffered from its worst annual recession post-war in 2020, when GDP shrank by a record 9.6 percent amid the longest and most stringent lockdowns imposed at the onset of the COVID-19 pandemic. Gradual economic reopening led to 5.7-percent growth last year. Prior to the COVID-19 crisis, the Philippines was among emerging Asia’s best economic performers.
For Gudmundsson, “in addition to continued sound macroeconomic policies, enhanced focus on the implementation of structural reforms could contribute to raising productivity and reaching higher growth targets.”
The state planning agency National Economic and Development Authority (Neda) had projected a total of P41.4 trillion in foregone consumption and investments to the Philippine economy during the next 10 to 40 years as a result of the COVID-19 pandemic and its ensuing closure of face-to-face classes as well as neglect of other deadly diseases. (©Philippine Daily Inquirer 2022/Ben O. de Vera)
