"How did he arrive at this?"
After 18 months of a largely ineffective government policy of quarantines and lockdowns, two questions are uppermost in the minds of FIlipinos. The first question is, is the nation’s return to near-normalcy close at hand? The second question is, is 2022 likely to be the year when the return to near-normalcy will take place?
Predicting the anti-coronavirus trajectory of the Philippine economy—the rates of pick-up in production activity, jobs re-creation, growth of incomes and increases in sales—has been the domain of economists, economic policymakers and business leaders. The messaging has been mixed, in the process creating confusion and frustration among Filipinos.
Being realistic and tell-it-like-it-is is not part of the job description of economic policymakers, whether the policy under consideration is monetary, fiscal or commercial in character. The aspirations and apprehensions of the people must be appropriately addressed, and so economic policymakers must ever sound upbeat and gung-ho. On the other hand, the economic analysts, especially those without business affiliations, have been true to their ideals, calling things as they have been seeing them. As for the business community, diversity of attitude has been the state of affairs there, with some sectors presenting a dire picture of the Philippine economy’s near-term prospects and others maintaining a posture of critical moderation so as to not unduly offend the government.
As if the Filipino people were not confused enough, the nation’s health authorities have weighed in with their own assessment of the economy’s near-term prospects. In the course of his appearance before the Senate to defend the 2022 GAA (General Appropriations Act) proposal for his department, the Secretary of Health stated that in his view the Philippine economy would return to near-normalcy only towards the end of 2022 and perhaps in 2023. With the statement of Secretary Francisco Duque III, the DOH (Department of Health) is now also in the business of economic forecasting.
Dr. Duque’s testimony came as a big shock to both the Duterte administration’s economic management team and the business community. Obviously, Dr. Duque did not clear his statement with his Cabinet colleagues, who have been signing the tune that the nation’s economic deliverance is just around the corner. The economic managers have been saying that the economy will likely end 2021 with GDP (gross domestic product) growth close to their 6-7 percent target range and that 2022 will be an equally good year for the GDP. Now, in true upsetting-the-applecart fashion, the Secretary of Health was saying that they are wrong and that the nation’s economic deliverance will not happen in 2021 and perhaps not even in 2022. Clearly, Dr. Duque was not in tune with the Secretary of FInance, the Secretary of Socio-Economic Planning and the Governor of the BSP (Bangko Sentral ng Pilipinas).
The business community was dumbfounded by Dr. Duque’s testimony. Since the beginning of this year they have been at the receiving end of bank economists’ prognostications of modest GDP growth – the average forecast has been in the 4.5-5.5 percent area – in 2021, with a fairly strong recovery in 2022. Filipino businessmen are now asking themselves: Who do we believe now, the economic managers and private-sector economists, or the Secretary of Health, who is the government’s No. 1 health official? They’re now wondering whether the economy really is almost out of the woods or still has some distance to go before regaining near-normalcy.
Those who firmly believe that the Philippine economy is making steady progress, will end 2021 with reasonable growth, and will do even better next year should ask Dr. Duque to explain how he arrived at his economic forecast.
