Philippine economic growth is projected to remain robust this year despite the hit from the Omicron variant in January given the strong job creation in December 2021 and the expected rise in infrastructure spending.
According to the February 2022 issue of the Market Call, the monthly joint publication of First Metro Investment Corporation (FMIC) and the University of Asia and the Pacific (UA&P), the higher-than-expected 7.7-percent gross domestic product (GDP) in the last quarter of 2021 “rekindled optimism that the economy is back on the rapid growth track.”
Citing government data, the report said 797,000 jobs were created last December, bringing the total employment number for the last quarter to 2.7 million, which in turn, boosted economic expansion during the period.
The stronger-than-expected growth in October to December resulted in the full-year print of 5.6 percent, the report said.
A plus for domestic growth was the debt-to-GDP ratio of 60.5 percent by the end of last year, which was lower than the publication’s projection of 63 percent.
Another positive factor is the easing of the domestic inflation rate, which decelerated further to 3 percent last January from the previous month’s 3.2 percent, it said.
To date, the BSP’s overnight reverse repurchase (RRP) rate is at a record-low 2 percent, the overnight deposit rate at 1.5 percent, and the overnight lending rate at 2.5 percent.
Amidst these positive developments, the report forecasts the peso to weaken against the US dollar.
“With bulging trade deficits hitting record levels and the U.S. dollar remaining strong, the peso shall experience upward pressure,” it added.
To date, the local currency is holding up at 51-level against the US dollar. (PNA)
