The Philippine economy is finally back to its pre-pandemic level, with daily COVID-19 cases trickling to a few hundreds. It grew at a robust pace of 8.3 percent in the first quarter of 2022 and topped expectations. It was a strong performance that validated the argument that the Philippines could live and deal with the virus with a reopened economy.
Filipinos were back spending in malls and restaurants, and traveling to their home provinces. As a result, private consumption or household demand rose 10.1 percent in the first three months of 2022, a sharp reversal from the 4.8-percent contraction in the same period last year.
The easing of restrictions after the Omicron surge in January and the increasing vaccination rate among Filipinos have allowed the economy to expand faster in the first quarter. The laxer mobility restrictions enabled more Filipinos to find jobs and earn a living. As proof, factory production jumped 336 percent in March alone while external trade expanded 18.6 percent.
The unemployment rate in March also dropped to 5.8 percent, the lowest since the start of the pandemic. Employment creation, meanwhile, stood at 4.4 million above the pre-pandemic level.
The glowing economic figures in the first three months of 2022, however, are not a cause for celebration yet. As the economic team of President Rodrigo Duterte points out, the recovery process is missing the contribution of the education sector.
Face-to-have classes have not fully resumed. More than the economic activity foregone from school closures, the Philippines will have to deal with the social cost of an under-educated population. The immediate resumption of face-to-face schooling and a catch-up plan to regain lost learning in the past two years should be one of the priorities of the incoming administration to keep the nation’s demographic dividend. The share of the working-age population in the Philippines has outstripped that of the non-working age, giving the country a bigger growth potential.
The incoming administration and its economic team by now should have a clear idea on how to sustain the economic gains achieved by the outgoing government in the first quarter of the year. Economic growth is fraught with challenges that include the pandemic, high prices, a rising debt level, unequal distribution of wealth and climate change. No government should shy away from these problems.