Philippines Economic Update, December 2021 : Regaining Lost Ground, Revitalizing the Filipino Workforce
The economic rebound gained momentum in the third quarter of 2021 despite another COVID-19 wave. The Philippines has, so far, faced its worst infection wave in September when the 7-day daily average reached about 21,000 cases due to the Delta varia...
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World Bank, Washington, DC
2022
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| Online Access: | http://documents.worldbank.org/curated/undefined/099710012062131492/P1774080b8d6f508b0944c08618e5c8a18d http://hdl.handle.net/10986/36874 |
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okr-10986-368742022-01-26T05:10:45Z Philippines Economic Update, December 2021 : Regaining Lost Ground, Revitalizing the Filipino Workforce World Bank ECONOMIC GROWTH EXTERNAL SECTOR MONETARY POLICY FISCAL TRENDS POVERTY EMPLOYMENT ECONOMIC OUTLOOK LABOR MARKET JOBS POLICY The economic rebound gained momentum in the third quarter of 2021 despite another COVID-19 wave. The Philippines has, so far, faced its worst infection wave in September when the 7-day daily average reached about 21,000 cases due to the Delta variant. In response, the authorities reimposed stringent mobility restrictions in Metro Manila and other key metropolitan areas. Nonetheless, compared with previous waves, domestic activity has been less sensitive to infections. Public containment measures constrained overall mobility less, while households and firms have learned to cope with infections and diminished mobility. As a result, the growth momentum was not severely hampered, and the third quarter growth surprised on the upside, exceeding market expectations. The economy expanded by 4.9 percent in the first three quarters of 2021, rebounding from a 10.1 percent contraction over the same period in 2020. Although partially driven by base effects, the growth expansion also reflected an increase in economic activity despite the implementation of several lockdowns. Growth was supported by the industry sector, driven by double-digit growth in manufacturing and robust public construction activity. The services sector posted a more moderate expansion as some key services were subdued by mobility restriction measures. The agriculture sector contracted as farm and livestock outputs were impacted by typhoons and ongoing outbreak of African Swine Fever. Meanwhile, domestic demand improved, supported by a resurgence in public construction spending. Private consumption picked up but still tempered by elevated inflation and unemployment, mobility restrictions, and low consumer confidence. Public consumption growth eased, in part due to the base effects from the swift disbursement of fiscal support a year ago. The global economic recovery strengthened exports, although services trade remained weak. The fiscal stance remains supportive of economic recovery, but the policy space is narrowing. Public spending accelerated from 23.6 percent of GDP in the first three quarters of 2020 to 24.6 percent of GDP in the same period in 2021, in line with the recovery in public investment and ongoing fiscal support. Infrastructure outlays increased from 3.5 percent of GDP to 4.7 percent of GDP in the first three quarters of 2021, a result of the government’s push on investment spending as part of its recovery program. Meanwhile, public revenues fell from 16.8 percent of GDP in the first three quarters of 2020 to 16.3 percent of GDP over the same period in 2021. Tax revenues rebounded due to strong tax and customs collections, but non-tax revenue contracted following the significant dividend remittances to the Bureau of the Treasury (BTr) in the beginning of the pandemic. The fiscal deficit widened from 6.9 percent of GDP in Q1-Q3 2020 to 8.3 percent of GDP in Q1-Q3 2021. The wider fiscal deficit has resulted in higher financing needs, which have been met by increased public borrowing. Public debt increased from 54.6 percent of GDP at end-2020 to 63.1 percent of GDP at end-September 2021. 2022-01-25T15:03:52Z 2022-01-25T15:03:52Z 2021-12-06 Report http://documents.worldbank.org/curated/undefined/099710012062131492/P1774080b8d6f508b0944c08618e5c8a18d http://hdl.handle.net/10986/36874 English CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo World Bank World Bank, Washington, DC Economic & Sector Work Economic & Sector Work :: Economic Updates and Modeling East Asia and Pacific Philippines |
| repository_type |
Digital Repository |
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Foreign Institution |
| institution |
Digital Repositories |
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World Bank Open Knowledge Repository |
| collection |
World Bank |
| language |
English |
| topic |
ECONOMIC GROWTH EXTERNAL SECTOR MONETARY POLICY FISCAL TRENDS POVERTY EMPLOYMENT ECONOMIC OUTLOOK LABOR MARKET JOBS POLICY |
| spellingShingle |
ECONOMIC GROWTH EXTERNAL SECTOR MONETARY POLICY FISCAL TRENDS POVERTY EMPLOYMENT ECONOMIC OUTLOOK LABOR MARKET JOBS POLICY World Bank Philippines Economic Update, December 2021 : Regaining Lost Ground, Revitalizing the Filipino Workforce |
| geographic_facet |
East Asia and Pacific Philippines |
| description |
The economic rebound gained momentum
in the third quarter of 2021 despite another COVID-19 wave.
The Philippines has, so far, faced its worst infection wave
in September when the 7-day daily average reached about
21,000 cases due to the Delta variant. In response, the
authorities reimposed stringent mobility restrictions in
Metro Manila and other key metropolitan areas. Nonetheless,
compared with previous waves, domestic activity has been
less sensitive to infections. Public containment measures
constrained overall mobility less, while households and
firms have learned to cope with infections and diminished
mobility. As a result, the growth momentum was not severely
hampered, and the third quarter growth surprised on the
upside, exceeding market expectations. The economy expanded
by 4.9 percent in the first three quarters of 2021,
rebounding from a 10.1 percent contraction over the same
period in 2020. Although partially driven by base effects,
the growth expansion also reflected an increase in economic
activity despite the implementation of several lockdowns.
Growth was supported by the industry sector, driven by
double-digit growth in manufacturing and robust public
construction activity. The services sector posted a more
moderate expansion as some key services were subdued by
mobility restriction measures. The agriculture sector
contracted as farm and livestock outputs were impacted by
typhoons and ongoing outbreak of African Swine Fever.
Meanwhile, domestic demand improved, supported by a
resurgence in public construction spending. Private
consumption picked up but still tempered by elevated
inflation and unemployment, mobility restrictions, and low
consumer confidence. Public consumption growth eased, in
part due to the base effects from the swift disbursement of
fiscal support a year ago. The global economic recovery
strengthened exports, although services trade remained weak.
The fiscal stance remains supportive of economic recovery,
but the policy space is narrowing. Public spending
accelerated from 23.6 percent of GDP in the first three
quarters of 2020 to 24.6 percent of GDP in the same period
in 2021, in line with the recovery in public investment and
ongoing fiscal support. Infrastructure outlays increased
from 3.5 percent of GDP to 4.7 percent of GDP in the first
three quarters of 2021, a result of the government’s push on
investment spending as part of its recovery program.
Meanwhile, public revenues fell from 16.8 percent of GDP in
the first three quarters of 2020 to 16.3 percent of GDP over
the same period in 2021. Tax revenues rebounded due to
strong tax and customs collections, but non-tax revenue
contracted following the significant dividend remittances to
the Bureau of the Treasury (BTr) in the beginning of the
pandemic. The fiscal deficit widened from 6.9 percent of GDP
in Q1-Q3 2020 to 8.3 percent of GDP in Q1-Q3 2021. The wider
fiscal deficit has resulted in higher financing needs, which
have been met by increased public borrowing. Public debt
increased from 54.6 percent of GDP at end-2020 to 63.1
percent of GDP at end-September 2021. |
| format |
Report |
| author |
World Bank |
| author_facet |
World Bank |
| author_sort |
World Bank |
| title |
Philippines Economic Update, December 2021 : Regaining Lost Ground, Revitalizing the Filipino Workforce |
| title_short |
Philippines Economic Update, December 2021 : Regaining Lost Ground, Revitalizing the Filipino Workforce |
| title_full |
Philippines Economic Update, December 2021 : Regaining Lost Ground, Revitalizing the Filipino Workforce |
| title_fullStr |
Philippines Economic Update, December 2021 : Regaining Lost Ground, Revitalizing the Filipino Workforce |
| title_full_unstemmed |
Philippines Economic Update, December 2021 : Regaining Lost Ground, Revitalizing the Filipino Workforce |
| title_sort |
philippines economic update, december 2021 : regaining lost ground, revitalizing the filipino workforce |
| publisher |
World Bank, Washington, DC |
| publishDate |
2022 |
| url |
http://documents.worldbank.org/curated/undefined/099710012062131492/P1774080b8d6f508b0944c08618e5c8a18d http://hdl.handle.net/10986/36874 |
| _version_ |
1764486074779828224 |