Business sees 6.5% GDP growth this year

Filipino businessmen expect the domestic economy to grow 6.5 percent this year with potential for an upswing of up to 7 percent if the face-to-face classes will resume within the year.    

“We stick to the 6.5 percent GDP growth,” said Perry Ferrer, chairman of the 48^th Philippine Business Conference to be held on October 19-20 at the Manila Hotel.

In his opening speech at the press launch for this year’s PBC, the biggest annual gathering of businessmen in the country, Ferrer said that GDP is likely to grow by 6.0 to 6.5 percent and 8 percent growth within the second half of this year may even be attainable if face-to-face classes were to resume. The Department of Education already said that face-to-face classes will resume in August this year, but full reopening could be in  November yet.  

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The PCCI GDP projection is lower than the 6.5-7.5 percent growth assumption adopted by the

 Development Budget Coordination Committee, an inter-agency body tasked to set the government’s macroeconomic assumptions, and also lower than the previous Duterte administration’s earlier goal of 7.0 percent to 8.0 percent.

Nonetheless, Ferrer enumerated a couple of directional scenarios that should support expansion of the domestic economy in 2022 and beyond.

Aside from their 6.5 percent 2022 GDP projection, Ferrer said PCCI expects economic activity will be digitally enabled and hyperlocal; increasing employability of workforce is continuously improving the Philippine labor market; and Philippine exports are seen to sustain growth on a much better position than pre-pandemic levels.

But behind these growth scenarios are lingering issues that may hamper growth. “The PCCI is wary of lingering issues and threats,” he said.

These threats include the peso breaching the ₱56:$1 mark; hence, peso depreciation posing at 7.4 percent;  an extremely high fuel surcharge affecting public and private transport, including airline and shipping industries among others; inflation reaching an all-time high of 6.1 percent resulting to a spike in prices of non-oil commodities such as food and agricultural products; and power supply shortages and high electricity rates that disrupt daily economic activities.

Even as the world gradually recuperates from the COVID-19 pandemic, Ferrer said, the Russia-Ukraine conflict exacerbated existing supply-chain disruptions and weak conditions of the global commodities markets.

“There seems to be no end to the social and economic unrest that we, as a society, are experiencing,” he said.

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Nonetheless, he said, PCCI will stick to its “6.5 percent GDP” growth projection this year.

The PCCI also expressed optimism that President Marcos’ appointed economic team, dubbed as the “best team”, will steer the domestic economy to full-time recovery.

PBBM’s appointment of technocrats and experts to cabinet posts is a welcome development on the part of PCCI, most especially in the Department of Labor and Employment (DOLE), Department of Finance (DOF), National Economic and Development Authority (NEDA), Bangko Sentral ng Pilipinas (BSP), Department of Trade and Industry (DTI), and the Department of Information and Communications Technology (DICT).

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The article was originally published in Manila Bulletin and written by Bernie Cahiles-Magkilat.

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