‘Polls to boost economy in H1’

MANILA, Philippines — The Philippine economy may see better growth at least for the first half of 2022 as the upcoming  elections are expected to spur heavy consumer spending.

In a report, First Metro Investment Corp. (FMIC) and University of Asia and the Pacific (UA&P) Capital Markets Research said the latest economic data are pointing to an economy “on the mend.”

“The momentum spawned by Christmas outlays and election spending should carry the torch at least for the first half of 2022,” FMIC said.

Following the 5.6 percent gross domestic product (GDP) growth in 2021, FMIC said that a further acceleration in the economy may happen this year.

It said economic growth may reach six to seven percent this year.

Apart from the May polls, FMIC’s optimism for the first semester follows the declining unemployment rate as the economy reopens.

“While a slight correction may occur in December, the excited reopening of businesses and consumer spending seen in malls and restaurants should provide the needed impetus for the economic recovery gaining traction,” it said.

Industrial output is also on the rise, increasing by 25.4 percent year-on-year.

Further, FMIC emphasized that national government expenditures should perform better as infrastructure spending is boosted.

Disbursements for current and capital outlays excluding interest payments, allotments to local government units, and subsidies climbed by 16 percent as infrastructure spending continued.

FMIC said the easing of inflation would help this year’s recovery. For the first time in 2021, inflation slipped to within the central bank’s target in December after it cooled to 3.6 percent.

Despite elevated crude oil prices in the global market, it said inflation would remain within the range and average 3.7 percent for the entire year.

Likewise, remittances are seen to remain robust, but the widening trade deficits due to high oil prices and stronger economic growth in 2022 should keep the peso on a depreciation mode.