AUGUST 9, 2022

Colleagues in government, friends from the media, fellow Filipinos,

Good morning!

Our country’s recovery from its most significant economic and health challenge remains strong due to improved risk management as more social and economic activities have been allowed. For the remainder of the year, we must apply the same or even better risk management protocols and protect the most vulnerable against high inflation and other shocks and scarring due to COVID-19.

According to the Philippine Statistics Authority, our economy sustained its expansion in the second quarter of 2022, with real GDP growth of 7.4 percent. This growth is slightly less than the median forecast of 7 and a half percent; still, this figure places the country as the second best-performing nation among the region’s major emerging economies that have released their second quarter reports. Our country is next to Vietnam’s 7.7 percent but faster than Indonesia’s 5.4 percent and China’s 0.4 percent. This performance also remains in line with our expectations, or our expected 6.5 to 7.5 percent growth in 2022.

Timely changes in COVID-related policies, such as easing alert levels, removing tourism restrictions, and accelerated vaccine rollout, helped increase economic activities. As of June 2022, around 85 percent of the economy is already under Alert Level 1. That these changes were implemented during the recently-held national and local elections demonstrates that, indeed, “living with the virus” is possible.

All sectors on the production side expanded in the last quarter, driven by the services and industry sectors at 9.1 percent and 6.3 percent, respectively. Transport, accommodation, food service, and other services have shown continued yet slow signs of recovery to their pre-pandemic levels. Meanwhile, the agriculture sector remained weak at 0.2 percent growth as the sector remains vulnerable to natural calamities and rising input costs.

Given the agriculture sector’s weak performance, the government will provide support through lower input costs, access to new farming technologies, financial assistance to farmers, and strengthening the agricultural value chain.

Meanwhile, the manufacturing sector’s growth decelerated to 2.1 percent in the second quarter, down from 22.4 percent in the same quarter last year. The slowdown was due to the weaker growth in computers, electronic and optical products, chemical and chemical products, and food products. The slowdown may be due to inflationary pressures brought about by the Russia-Ukraine war, weakening global demand, and supply chain disruptions brought by lockdowns in China.

We are also pleased to note the recovery of the services sectors that have been hit hard by the COVID-19-induced restrictions.

The trade sector grew by 9.7 percent in the second quarter from 5.4 percent in the same period last year. The increase in foot traffic in retail and recreation centers, given improvements in mobility and easing of border restrictions, supported the faster growth in wholesale and retail trade.

The transport sector exhibited faster growth of 27.1 percent this year from 24.3 percent in the same period last year. The acceleration confirms the data from Google Mobility, showing that visits to public transport stations, workplaces, and retail and recreational places are already above pre-pandemic levels since the second half of May 2022.

Both accommodation and food & beverage service activities sustained double-digit expansion during the reference period. Colliers reported that the average hotel occupancy for the first half of 2022 rose to 47 percent, attributing the increase to the return of business travel, easing of travel restrictions for fully-vaccinated travelers, and an upbeat staycation market driven by leisure travels by locals.

Meanwhile, other services grew by 39.5 percent in the second quarter, up from 37.6 percent last year. Robust output growth is seen in the arts, entertainment, recreation, and other service activities.

Given this evidence, we are committed to pursuing the country’s full reopening, including the return of face-to-face schooling to address the learning losses and increase domestic activities. This push will begin with the health sector’s efforts to increase booster uptake. Recently, the Department of Health launched the “PinasLakas” campaign, which aims to boost 50 percent of the 78 million target population within the first 100 days of the Marcos administration. This move will allow more areas to de-escalate to Alert level 1 and, eventually, the complete removal of restrictions that hinder economic activity.

The full reopening of the economy will indeed generate more income-earning opportunities. But the purchasing power of that income may be eroded by the high inflation, primarily resulting from increased fuel and food costs. Consequently, the government is focused on ensuring food security and reducing transport, logistics, and energy costs. The Department of Budget and Management has recently approved the release of the second tranche of the Targeted Cash Transfer Program, which amounts to 4.1 billion pesos and will benefit four million Filipino families. The distribution of targeted subsidies for PUJ drivers and operators, including tricycle drivers, and fuel discounts to farmers and fisher folk will help cushion the impact of elevated oil prices on vulnerable groups.

Going forward, we will embark on a mission of transformation that will further strengthen our domestic economy and result in a prosperous, inclusive, and resilient society. A big part of the transformation is digital transformation. Government processes will be more efficient and business- and people-friendly. We will begin bridging the digital divide immediately since we have seen how it can facilitate transactions and connections, provide other ways of producing and delivering goods and services, improve access to learning opportunities, and so on. We will expedite the issuance of the National ID to support the country’s digital transformation. We are closely working with our colleagues at the Bangko Sentral ng Pilipinas and the PSA to ramp up the National ID rollout and meet the target of releasing 92 million national IDs by 2023, as directed by the President.

There will be many more transformations in the social and economic sectors. The overall goal is to reinvigorate job creation and reduce poverty.

These strategies and corresponding targets will all be elaborated in Philippine Development Plan 2023-2028, which the President has directed to be completed within the year. I hope to be able to present substantial updates to you at the next GDP press conference.

Yes, the road ahead is difficult, but it is surmountable. NEDA is working hard to formulate the best possible plans and policies that can overcome the challenges before us. We are committed to achieving sustained and inclusive growth amid the uncertainties and risks in these trying times. After all, matatag, maginhawa, at panatag na buhay is the future that every Filipino deserves.

Thank you, and have a pleasant day to all!

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