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Philippine economy grows in Q1 as COVID-19 rules lifted

MANILA (AFP) – The Philippine economy grew stronger than expected in the first quarter, officials said yesterday, as the lifting of COVID-19 restrictions and the start of the election campaign season ignited consumer spending.

Gross domestic product expanded by 8.3 per cent, compared with a 3.8 per cent contraction in the same period last year, the Philippine Statistics Authority said.

That beat expectations for 6.7 per cent growth and “surpassed the pre-pandemic gross domestic product”, President Rodrigo Duterte’s economic team said.

“We have restored many jobs and livelihood by shifting to a more endemic mindset, accelerating vaccination, and implementing granular lockdowns that only targetted the areas of highest risk while allowing the majority of our people to work and earn a living,” they said in a statement.

Most COVID-19 restrictions were lifted after an Omicron-fuelled surge in infections in January eased and vaccination rates rose, with families flocking to shopping malls, restaurants and holiday destinations.

The first quarter also overlapped with the start of the election campaign season, which typically boosts activity as many candidates hand out cash to secure support at the ballot box.

But private economists warned of economic headwinds building in the coming months as rising prices fuelled by supply chain disruptions and the Ukraine conflict squeezed household budgets.

The Philippines’ next president will face a “tough challenge” when he takes office on June 30, with inflation and record government debt among the most pressing issues, warned lead economist at the Bank of the Philippine Islands Emilio Neri.

Ferdinand Marcos Junior, who won Monday’s election by a landslide, has vowed to “hit the ground running”, with the economy, prices, jobs and education to be his government’s priorities.

Socioeconomic Planning Secretary Karl Chua said it was important for the president-elect to release details of his plans to ease concerns. Chua also expressed concern about schools yet to resume face-to-face classes more than two years after the pandemic started.

“We are very much concerned about the learning loss and impact on future productivity on our children,” he said.