A Resurgence of Optimism
In a few days, 2022 will end and we will welcome a fresh, new year. Many experts have expressed pessimism on the capacity of the country to achieve growth in 2023. They cited the risks to growth in the coming year, including inflation, hikes in interest rates — both of which are expected to dampen spending — and an expected slowdown in growth in advanced economies. There are certainly reasons to be pessimistic. But from where I stand, I think there are equally compelling reasons to expect a resurgence of optimism.
We are poised to end 2022 with a bang. The third quarter performance of the economy was exceptional, growing at a faster-than-expected rate. As the economy continues to reopen, the economy expanded by 7.6 percent in the third quarter from a year earlier. According to the latest report by the Asian Development Bank (ADB) the Philippine economy will grow 7.4 percent in 2022, up from the bank’s September forecast of 6.5 percent. The World Bank also issued a forecast of a 7.2 percent economic growth, much higher than its previous growth projection of 6.5 percent.
But even if you do not look at the numbers, you can feel this resurgence of optimism in our people. I know it is not scientific but I have always placed credence on observing people in our businesses — the malls, the retail stores. They are a good indicator of the confidence of our people in our future.
For instance, even when the economy reopened in 2021 you can still see the trepidation of people. I would go to our malls and our retail outlets and observe in between meetings. I saw how people slowly trickled back in malls and coffee shops still wary of the virus. But from late 2021 until today, I saw the return of confidence in people going out. Malls, supermarkets, restaurants and coffee shops filled up with people not just in our business but across the board.
I think this has something to do with some of the changes government made that affected how people viewed the pandemic. There was a time when we were constantly looking at the number of daily infections and panic if we see a rise in the numbers of positive testing. I am glad that government agencies have shifted to a weekly update of the numbers and refocusing efforts of health protocols.
I also thought that the decision of the new administration of President Ferdinand Marcos, Jr. to ease mask requirements had an important psychological effect on people. Do not get me wrong. I believe that wearing of masks is an important layer of protection from the virus. And by observing people walking in malls and public places, many are still wearing masks despite the easing of the mask mandate.
But the psychological effect is that people have accepted the fact that this is the new normal. People are back with a vengeance — shopping, eating out, having coffee — signs of normalcy and good signs for the economy. The stronger-than-expected third quarter growth was primarily brought about by stronger-than-expected domestic demand as people got their jobs back or found new jobs and tourism (domestic and international) has roared back to life.
There are headwinds in our future of course. Inflation, driven by rising cost in food, is a great concern as well as the expected increase in interest rates. And who knows what crisis lies ahead? The pandemic was a surprise in 2020 and the Ukraine-Russia conflict was the unknown in the past year. But as the ADB report noted, “the Philippine economy has shown strong underlying growth momentum and resilience in 2022 and this is expected to continue in 2023.”
I agree. And that resilience is founded on the optimism of our people. This is confirmed by the latest Social Weather Stations (SWS) survey which showed that 45 percent of Filipinos “are optimistic for the year ahead.” Only two percent of those surveyed said they felt their lives will worsen.
We cannot predict what will happen in 2023 just as no one actually foretold the pandemic or the Ukraine crisis. Who knows what the new year will bring? But there is one thing we already know — our people will persevere. That is enough cause to celebrate.
Happy New Year everyone!