Upper middle-income status on track

This is a strong signal for the return to pre-pandemic or 2019 output levels by 2022

Key policy measures and reforms, including those aimed at placing the Philippines in a strong position to weather the impact of the pandemic, are expected to boost recovery to nudge an upper middle-income status by next year.

The Development Budget Coordination Committee retained its growth targets of six percent to seven percent this year, and 7 percent to 9 percent in 2022.

The economy shrank a record 9.5 percent in 2020 and posted a smaller contraction of 4.2 percent in the first quarter of 2021 but was expected to stage a strong recovery before the end of the year with the rollout of vaccines against coronavirus disease 2019 (Covid-19).

“This is a strong signal for the return to pre-pandemic or 2019 output levels by 2022. Growth will be driven by the government’s three-pillar strategy to accelerate economic recovery,” Socioeconomic Planning Secretary Karl Kendrick Chua said.

Chua said the three pillars that will govern economic recovery include the safe re-opening of the economy, the implementation of the recovery program, and the timely implementation of the government’s vaccine deployment program.

“Once the present spike is over, the government will implement quarantine relaxations in a phased approach to boost our recovery this year. Over the near term, the government will work towards moving NCR (National Capital Region) to MGCQ (modified general community quarantine), or better, allow families and children to participate in the economy, and restart face-to-face schooling,” he said.

Chua said the recovery program includes the P4.5-trillion fiscal year 2021 General Appropriations Act (GAA), the extended validity of the 2020 GAA, and the implementation of the Corporate Recovery and Tax Incentives and Financial Institutions Strategic Transfer laws.