Fresh Data Indicate Solid Recovery
We are still a month away before the official release of the gross domestic product data in the first quarter of 2022. Judging from the early numbers and indicators I’m reading in the newspapers, however, I can confidently say that the Philippine economy posted robust growth in the first three months of the year.
Fresh data point to a Philippine economy that is nearing the pre-pandemic level of business activities. Higher automotive sales, increased electricity demand, a vibrant manufacturing sector and recharged tourism activities are telltale signs of a strong economic rebound in the first quarter of 2022.
The higher electricity sales of Manila Electric Co. in the first quarter of the year, as predicted by a company official, reflected the strong consumption of the residential, commercial and industrial sectors in Metro Manila and surrounding provinces amid the easing of mobility restrictions. Meralco sales likely expanded 6 percent in the first quarter of 2022 from the same period last year.
Electricity consumption is on the rise, reaching pre-pandemic levels in 2021 when it also rose 6 percent to 46,073 gigawatt-hours from 43,572 GWh in 2020. Another 6-percent growth in 2022 would bring the total to a new record high.
The nation’s fuel consumption is another key indicator of an economy that has long exited recession. Energy demand last year already breached the pre-pandemic levels, which means many of our factories and commercial establishments resumed full operations, while household demand remained steady.
Per the latest report of the Department of Energy, the country’s net import bill—or the difference between oil exports and imports—jumped 88 percent in 2021 to $11.146 billion from $5.93 billion in 2020 on the back of higher volumes and prices.
The Philippines’s net oil import bill in 2021 surpassed the pre-pandemic level of $11.075 billion in 2019. In terms of volume, net imports of oil climbed to 22.204 billion liters in 2021, exceeding the pre-pandemic level of 16,026 billion liters in 2019 and 15,137 billion liters in 2020.
The higher fuel consumption is evident in the traffic congestion that re-emerged in major thoroughfares of Metro Manila, like EDSA and C5, as well as major tolls roads such as North Luzon Expressway, Subic-Clark-Tarlac Expressway and South Luzon Expressway.
Increased automotive sales, meanwhile, are a critical gauge of a rebounding economy. Car sales in March surged 43 percent to 29,685 from a year ago and almost reached the industry’s pre-pandemic monthly level of 30,000 units. Car sales are a barometer of consumer confidence. The higher figures mean the middle-income earners have regained their confidence to invest in big-ticket items that include properties.
The healthy performance of the manufacturing sector of late is another encouraging sign. The volume of production index grew 84.3 percent in February from a year ago, faster than the 17.1-percent expansion in January, after laxer mobility restrictions increased consumer and business confidence.
We should prepare for and meet the sustained increase in demand as the economy finds its way back on the growth track. The International Monetary Fund officially confirmed that the Philippines was showing signs of economic recovery from the pandemic starting in the second semester of 2021.
There is no doubt that most economic sectors are experiencing growth again. What will complete the recovery from the pandemic is the return of both foreign and local travelers to tourism destinations. This is crucial because the travel and tourism sector, directly and indirectly, employs millions of Filipinos.
I welcome the prediction of the World Travel and Tourism Council that the sector will grow faster than the GDP over the next decade. The Philippines, by the way, successfully hosted the WTTC Annual Global Summit at Okada Manila on April 20 to 22, where industry players expressed a positive outlook for the next 10 years.
The local tourism sector is showing signs of life. Our local airlines and the travel sector, as I’ve said in my previous column, are bouncing back strongly after tourism took a plunge in the early months of the pandemic.
To recap, I’m confident to say that the Philippine economy is about to reach its pre-pandemic level as supported by emerging indicators. The Philippines has nowhere to go but up.