THE Philippines will not be as affected as other countries should the world fall into a recession this year, Trade Secretary Alfredo Pascual claimed.
In an interview on radio station DZRH on Saturday, Pascual said a recession — where growth falls for at least two quarters — would not mean that the domestic economy would also contract.
Gross domestic product (GDP) growth last year is expected to be just short of the government's 6.5- to 7.5-percent target. For 2023, economic managers are targeting slower growth of 6.0 to 7.0 percent.
Growth as of the end of the third quarter was 7.7 percent, already above the official 2022 target. Full-year results will be released by the government before the end of this month.
“The situation here in the Philippines is different as the business landscape has been good overall” due to strong consumer spending, Pascual said.
This also means that the country is not as dependent on exports as others, he added.
A rise in overseas Filipino worker remittances “also gave a boost to the spending power of the Filipinos,” Pascual continued.
As of end-October last year, personal remittances were up 3.1 percent to $29.72 billion from $28.82 billion a year earlier based on latest central bank data.
“In addition, the IT-BPM (information technology-business process management) sector is adding to the boost as it continues getting more investments and employment,” Pascual said.
“These two alone make up about 20 percent of our gross domestic product and that is very huge.”
Pascual said tourism, which picked up this year as the government further relaxed mobility and health restrictions, was poised for summer surge.
“Local tourism has been on the rise as many Filipinos have already been going around,” he said.
“In fact, the so-called 'revenge travel' has convinced the local resorts who shut down during the pandemic to reopen their doors again.”
Other businesses benefiting from the tourism resurgence are restaurants, shops and transportation.
Key industries like exports, manufacturing and business process outsourcing “are also expected to continue growing this year because of the massive digitization thrust of the Philippines,” Pascual said.
“Moreover, with massive interest from investors of these sectors, we also see employment in the country rising as well this year.”
The World Bank last week warned that the world was close to a recession as it slashed forecasts for this year and the next.
While global GDP growth was estimated to have hit the forecast 2.9 percent last year, the projections for 2023 and 2024 were revised to 1.7 percent and 2.7 percent, respectively, from 3.0 percent previously for both years.
The Philippines, meanwhile, is expected to miss its official 2023 and 2024 targets.
The Washington-based multilateral raised its 2022 growth estimate to 7.2 percent from 5.7 percent, cut the 2023 forecast to 5.4 percent from 5.6 percent and raised that for 2024 to 5.9 percent from 5.6 percent.
The 2023 and 2024 revisions fall below the government's targets for those years.
GDP growth in 2021 was 5.7 percent, a recovery from 2020's 9.5-percent contraction.
