STATEMENT OF NEDA SECRETARY ARSENIO M. BALISACAN
ON THE PHILIPPINE ECONOMIC PERFORMANCE
FOR THE FOURTH QUARTER AND FULL YEAR OF 2022
JANUARY 26, 2023
Colleagues in government, friends from the media, fellow Filipinos—
I am pleased to announce that the Philippine economy’s growth remains robust as the government continues to intensify its efforts to restore the economy to its high-growth trajectory, creating more and better-quality jobs and speeding up poverty reduction.
Our improved COVID-19 risk management and the easing of mobility restrictions have created a positive economic outlook, boosting economic activity and creating more jobs despite external headwinds.
We have drawn upon the lessons gained almost three years into the COVID-19 pandemic. Our strong economic growth performance for 2022 proves that our calibrated policies and strategies have helped put us on the path to recovery and on track to achieving our aspiration for an inclusive, prosperous, and resilient society by 2028.
Performance of the economy
As reported by National Statistician Dennis Mapa, the Philippine economy grew by 7.2 percent in the fourth quarter of 2022, exceeding the median analyst forecast of 6.8 percent. This robust fourth-quarter growth implies a 7.6 percent full-year growth in 2022 that exceeds the Development Budget Coordination Committee’s target of 6.5 to 7.5 percent for the year.
Among the major emerging economies in the region that have released their Q4 2022 real GDP growth, the Philippines grew the fastest, followed by Vietnam at 5.9 percent and China at 2.9 percent.
On a seasonally adjusted quarter-on-quarter basis, the Philippine economy expanded by 2.4 percent, driven by increased economic activity mainly from pent-up demand as the economy fully reopened in the last three months of 2022.
Our robust performance in the fourth quarter reflected strong domestic demand, with three-fourths contributed by household consumption and almost a fifth by investment. The improvements in labor market conditions, increased tourism, “revenge” and holiday spending, and resumption of face-to-face classes supported growth in the quarter, further reflecting a solid rebound in consumer and investor confidence in the economy.
The growth in domestic demand was met by expansion in the services and industry sectors, with production in most subsectors back to their pre-pandemic levels. Services growth was mainly driven by wholesale and retail trade, while the expansion of manufacturing and construction subsectors supported industry growth. In contrast, agricultural output slightly declined in the fourth quarter, highlighting the need to strengthen the sector’s productivity and resilience against natural disasters, animal diseases, and climate change.
Nonetheless, economic growth came with more jobs. We saw vibrant labor market conditions, with the country’s unemployment rate down to 4.2 percent in November 2022 from 6.5 percent in the same period in 2021. This performance marks our lowest unemployment rate since 2005. We also observed an improvement in the quality of employment relative to the same period last year, as more workers found remunerative and stable work in private establishments and became employed in full-time jobs.
With the resumption of face-to-face classes, the boost in the activities of small and large enterprises alike, and the resurgence of local tourism causing ripple effects towards the recovery of all the other sectors affected by the pandemic, we are confident that we will remain on our high-growth trajectory.
More importantly, through the Philippine Development Plan (PDP) 2023-2028, we will ensure inclusive growth that creates more and better, green, or resilient jobs to enable Filipinos to improve their quality of life. Inclusive growth across the archipelago will be our vehicle for reducing poverty incidence from 18.0 percent of the population in 2021 to a single-digit level by 2028.
Government interventions and recommendations
As global and domestic headwinds persist and keep commodity prices elevated, protecting the purchasing power of Filipinos and ensuring food security remain at the top of the government’s priorities.
We will continue to support consumers and affected sectors through the extension of reduced tariffs on various products, facilitation of an accessible food supply chain, reduction of transport and logistics costs, and other measures to cushion the impacts of inflation on the purchasing power of households.
Signed by President Marcos Jr. in December 2022, Executive Order No. 10, series of 2022 extended the reduced import rate duties on key commodities –pork, rice, corn, and coal – until December 31, 2023, to help provide diversified sources of food and agricultural inputs in the short term.
Complementarily, the Department of Agriculture’s Agribusiness and Marketing Assistance (AMAS) established more KADIWA outlets in Metro Manila, providing affordable agriculture and fishery products to ease consumers’ difficulties in buying essential food commodities.
These measures notwithstanding, we recognize that ensuring lasting food security means transforming and boosting domestic agricultural production. As such, the government will focus on modernizing agriculture and agri-business through farm mechanization, research and development, and enhanced inter-industry linkages to create and diversify higher value products.
Likewise, the government will continue to prioritize the creation and adoption of climate and disaster-resilient technologies, alongside the development and mainstreaming of early warning systems and anticipatory mechanisms that are imperative if we are to achieve and sustain gains in the agriculture and fishery sector.
By implementing the strategies identified in the PDP 2023-2028, we will protect Filipinos’ purchasing power and strengthen food production linkages and ensure nutrition improvement across all ages.
An economy is only as dynamic as its people. To ensure that the Philippines reaps the demographic dividend, we will prioritize policies to develop our human capital stock further, improve worker productivity, and promote measures for the efficient movement of people by reducing transport costs.
The Revised Implementing Rules and Regulations (IRR) of the Telecommuting Act, which considers the evolving nature of work, is expected to encourage the further implementation of alternative work arrangements and consequently reduce commuting costs for workers and address the traffic situation in NCR.
Significant structural reforms recently enacted, such as the economic liberalization laws and tax reforms, will also help attract investments to the country and boost job creation in the near term. With more businesses recovering and adopting digital processes, we expect to see demand for technology-adept workers expand further in the coming years.
Our participation in the recent World Economic Forum (WEF) proved fruitful as we showcased the Philippines as a prime investment destination in the ASEAN region. Given our relaxed mobility restrictions, sizeable domestic consumer market, and skilled labor force, now is the most fortuitous time to invest – we are more open now than ever for businesses to thrive in a wide array of industries: energy, water, logistics, transportation, agribusiness, infrastructure, manufacturing, tourism, health, education, and digital connectivity.
Good governance, particularly a strong rule of law, is also necessary for creating an environment conducive to promoting investments. In revitalizing our investment climate, the government is committed to ensuring that our regulations are transparent and conducive to long-term investment decisions.
Indeed, the development challenges we face are complex. While we worked hard to make the PDP 2023-2028 as comprehensive and holistic as possible, its implementation is proof of a good plan. In this connection, let me then take this opportunity to invite you to watch the live stream of the forum called “From Plan to Action: The Philippine Development Plan 2023-2028” on Monday, January 30, at 1:30 PM on the NEDA official social media pages. We have invited the President himself, and Cabinet Secretaries will share their action plans and address implementation issues. Representatives from local governments, the private sector, and civil society will join us.
Amid global headwinds, the government remains vigilant and prepared for the long and arduous journey ahead of us. Our goal is clear. What we want is an inclusive, prosperous, and resilient society where no one is poor and no one is left behind.
With the whole government working together in harmony and closer cooperation with the private sector, civil society, and development partners, we are determined to turn this vision into reality. We will continue to collectively strive for a matatag, maginhawa at panatag na buhay para sa lahat ng Pilipino.
Thank you, and a pleasant day to all.