Economic matters are critical to a nation’s development. It is a complex subject that is only understood by a handful of Filipinos. But while it is not everyone’s cup of tea, experts try to weigh in and make the general public more knowledgeable of these cases.
Romeo L. Bernardo, a former Undersecretary of the Department of Finance in the late 1990s, is one of these subject matter specialists.
Let’s catch what he sees in the Philippine economy:
Dismal Growth
One of the most recent reviews of Bernardo of the Philippine economic growth highlighted dismay over the 4.3% annual GDP for the second quarter of 2023, which is about two percent lower than the preceding quarter.
Alongside other analysts, Bernardo forecasted a 5% growth for the entire year. Other experts were also quick to ease their expectations for the Philippine GDP following a subpar run in the first half of 2023.
These forecasts and adjustments were reasonably objective, as Bernardo has seen the following factors in their numbers:
Restrains in the government’s execution – The Department of Public Works and Highways (DPWH) and the Department of Transportation (DOTr) deal with low absorptive capacities. These issues include delays, project prioritization, contract user fees and third parties involved.
Global economic factors– Several global issues have also influenced the slowing down of the country’s economic growth. The wars in Europe, the recession in the United States and the general management of the effects of COVID-19 are some factors that contribute to the delay in economic development.
Adverse effects of the pandemic – Although world leaders seem to have found the solution to COVID-19, there are still some side effects that the world continues to experience. Examples are reduced quantity and efficiency of the labor force and a decline in the education system and execution.
Affected Agriculture Sector – The Philippines has seen the agriculture sector suffer from the impacts of El Niño, inflation from wars and importation resistance being the main contributors affecting the nation’s food market.
What do these scenarios imply?
Substantially, more detailed factors make up Bernardo’s view of the Philippine economy.
But should these numbers be accurate, here is what they might indicate:
High budget cuts
Low incomes
Low public capital expenditures
Increased interest rates
Heightened vulnerability to global financial fluctuations
Lower GDP
What does the government say?
Despite these predicted hits on the Philippine economy in 2023, the government remained optimistic and posted a 6-7% target growth.
Strategically, here are the reforms the administration’s accountable officials target in context:
Imposition of new taxes on digital economy and junk food
Privatization of government operations and assets
Military pension reforms
Expenditure reforms
The actual score
In all of these assessments and forecasts, how did the Philippine economy perform?
From the low 4.3% GDP growth as of the second quarter of 2023, hope showed as the numbers rose to 6% the following quarter.
However, the last quarter of the year displayed a slight decline as rates went down by 0.4%. Based on the most recent data, the Philippines’ first quarter numbers stand at 5.7%, boosted by manufacturing, finance and insurance and wholesale and retail activities.
The much-expected growth for the rest of the year may remain tentative, but the officials and accountable leaders have their eyes on achieving these goals.
