“It’s the economy, stupid.” James Carville said this phrase.
He was one of the strategists of Bill Clinton’s Presidential campaign in 1992. That phrase was one of the themes which Clinton’s campaign focused on. The other two were “Change vs. more of the same” and “Don’t forget healthcare.”
Why is this phrase relevant? Especially now that the 2022 elections are finished? At the end of the day, it’s about the economy stupid. The incoming government of Marcos II must pay attention to our economy.
Where does the economy stand? Well, the Gross Domestic Product (GDP) of the Philippine economy grew by 8.3% in the 1st Quarter of 2022. For context, this is the third straight quarter of GDP growth which was greater or equal to 7.0%.
The recovery of the economy has many sources. First, the loosening of mobility restrictions led to a boom in domestic consumption. Domestic consumption drives the demand side of the Philippine economy. Household consumption grew by 10.1%. Government expenditure and Gross Capital Formation (GCF) grew by 3.6% and 20.0%, respectively.
On the production side, the industry sector led the way with a growth of 10.4%. The manufacturing subsector was the main contributor at 10.1%. At the same time, the “Services” sector also grew by 8.6%. The Wholesale and retail trade/repair of motor vehicles and motorcycles” subsector was the primary driver.
Other macroeconomic factors provide a more complete picture of how the economy fared. The Labor Force Participation rate rose to 65.4% in March. In addition, the unemployment rate dropped to 5.8%. These statistics indicate that more people are looking for and finding jobs. And, it also means that our labor market is recovering.
The statistics provide a rosy picture of the economy. My next column will tackle these drags to economic growth.