January 29, 2022 | 00:00
(As published on January 28, 2022) The country performed better than expected in 2021. National Income Accounts (NIAs) show the economy grew by 7.7%, above the median outlook of 6.5%.
The narrow range for the outlook fell to 3.9 percentage points, from 7.5 percentage points in the third quarter and 11.7 percentage points in the second quarter. This shows that the level of uncertainty has simmered. But despite the low level of uncertainty, many analysts continued to underestimate their assessment of growth performance.
The easing of restrictions accompanied by the lowering of alert levels in many areas and the better management of risks related to COVID-19 thanks to more targeted and granular confinements have enabled the economy to outperform. The arrival of much-needed vaccines and their effective administration has also contributed to the safe and gradual reopening of the economy, bringing back investor confidence.
However, the country must remain vigilant and not lower its guard. The emergence of the Omicron virus in the last week of 2021 indicates that the pandemic is still here and that a rapid change in alert levels is needed to avoid its deleterious impact.
No analyst was able to correctly predict fourth-quarter GDP growth, but four analysts were within 0.5 percentage points of actual growth. Analysts closest to reality were analysts at Ateneo Center (Ser Percival Pela-Reyes) who forecast 7.8%, De La Salle University (Mitzie Irene Conchada) who forecast 7.4%, Capital Economics (Alex Holmes) which forecast 7.3%.
Second place honors go to San Juan de Letran (Emmanuel Lopez) who forecast 7.2% — 0.5 percentage points above actual and HIS Markit (Rajiv Biswas) who forecast 7.1% – — 0.6 percentage points off the mark.
Then come RCBC (Michael Ricafort), ING Bank (Nicholas Antonio Mapa), Sun Life (Patrick Ella), Standard Chartered Bank (Jonathan Koh), BPI (Emilio Neri, Jr.), PNB (Alvin Joseph Arogo), AIM (John Paolo Rivera), Security Bank (Robert Dan Roces), Union Bank (Ruben Carlo Asuncion), Nomura (Euben Paracuelles), BDO (Jonathan Ravelas) and HSBC (Joseph Incalcatera). Their forecasts ranged from 4.9% to 7%.
The worst forecast was from Oxford Economics (Tsuchiya) which, at 4.0%, was down 3.7 percentage points.
The revision of Q3 GDP growth to 6.9% puts three forecasters just 0.4 percentage points behind — De La Salle University (Conchada), RCBC (Ricafort) and Standard Chartered Bank (Koh). These three forecasters had the best forecast.
GDP growth outlook and real figures for the first three quarters of 2021 (in %)
Basic data sources: BusinessWorld; Filipino Daily Investigator; CNN Philippines; Message of public interest
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