Review of the Philippine Economic Situation and Analysis of the State of the Nation in 2021

Abstract

At the start of its term, the Duterte administration reaped the benefits of the Philippines’ momentum of economic growth and poverty reduction; the country’s GDP continued to expand at above six percent during the 2016 to 2019 period while poverty incidence significantly declined to 16 percent in 2018. The government’s economic strategy was founded on the expansion of the national infrastructure program popularly known as the Build-Build-Build, funded by additional public revenues brought about by the Tax Reforms for Acceleration and Inclusion which it planned to further accelerate the country’s growth path. However, the COVID-19 pandemic shock in 2020 has dented this trajectory and impaired the short-run prospects of the country; at the same time, the lack of a robust fiscal response to the social and economic impacts of the pandemic may have further diminished the ability of the country to immediately continue its pre-pandemic growth trajectory. This paper illustrates the current economic situation in the country and lays down key recommendations for the final year of the Duterte administration.