To tame rising inflation, the Philippines extended the lower most favored nation (MFN) tariff rates for pork and rice reduced MFN rates for corn to 5 percent in quota (from 35 percent non-ASEAN) and 15 percent out-quota (from 50 percent) and eliminated the 7 percent MFN rate on coal. Rising domestic food, transport, and utility costs, as well as increased wages and transport fares, significantly increased the inflation expectations. The inflation rate averaged 4.1 percent in January-May 2022, in line with the Central Bank’s expected annual average inflation rate of 4.6 percent. Inflation pressures continue to build up through 2022, caused mainly by the Russian invasion of Ukraine that pushed up international oil and commodity prices.
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Higher prices of meat, transport, and fuel were the top drivers of inflation for the year. To meet the government’s GDP targets, officials support shifting all regions to the least restrictive COVID-19 alert level, boosting the vaccination rate, and fully resuming in-person schooling.Ĭonsumer price inflation averaged a three-year high of 4.5 percent in 2021, faster than the 2.6 percent in 2020 and above the Central Bank’s 2-4 percent target band. Domestic risk factors, such as potential COVID-19 infection resurgence, rising inflation, and increasing budget deficits and debts, could also temper the 2022 economic growth. Federal Reserve rate hikes, cloud the overall economic outlook. While strong domestic demand could help sustain the recovery momentum, external risks such as the Russian invasion of Ukraine, economic slowdown in China, global supply chain disruptions, and U.S. This brought the GDP to $88 billion, exceeding its 2019 level. GDP grew by 8.3 percent in the first quarter, higher than the 6.7 percent forecast and reversing last year’s 3.8 percent economic contraction. The Philippine government expects the economy to expand by 7-8 percent in 2022. The Philippines’ gross national income per capita was estimated at around $3,500 in 2021, below the World Bank’s upper middle-income range of $4,096 to $12,695. Philippine officials expect the country to achieve an upper middle-income status – a 2020 goal derailed by the pandemic – by 2023. Economic activity picked up during the year, driven by increased private consumption due to eased mobility restrictions, business reopening, and improvement in labor market conditions. This strong economic performance, the second fastest in ASEAN, brought the Philippines closer to its pre-pandemic 6.6 percent average gross domestic product (GDP) growth rate from 2012-2019. The Philippine economy grew by 5.7 percent in 2021, beating the government’s 5-5.5 percent target range and rebounding from the 9.5 percent pandemic-induced recession in 2020.
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