GDP likely contracted by 11.5% in Q3

MANILA, Philippines — Economic output in the third quarter likely contracted at a slower pace of 11.5 percent coming from a record contraction in the second quarter, according to UK-based market intelligence company IHS Markit.

In a report, IHS Markit said the Philippines is among the countries in the Asia-Pacific region where the extent of recovery may be limited by containment measures meant to arrest the spread of the coronavirus, as well as subdued consumer demand.

“The Philippines’ economy is expected to shrink at a weaker rate of 11.5 percent when compared to negative 16.5 percent in the second quarter,” IHS Markit said.

The country plunged into a recession in the second quarter , with output contracting by a record 16.5 percent after a months-long government-enforced lockdown paralyzed 75 percent of the economy.

This was the worst quarterly slump on record since the contraction of 10.7 percent in the third quarter of 1984 and 10.5 percent in the first quarter of 1985.

After a downward revision of first quarter economic decline to 0.7 percent, first semester contraction averaged at around nine percent.

During this time, the government enforced a severe Luzon-wide community quarantine that kept people indoors and limited consumption to basic necessities.

It was only in June when mobility restrictions in the country’s main island were loosened and other parts of the country were reclassified under lesser community quarantine tiers.

In August, however, Metro Manila and surrounding growth areas were placed under a strict community quarantine again for two weeks just when businesses had reopened and enforced public health measures to cope with the pandemic.

After the lifting, Metro Manila remained under General Community Quarantine, the less severe quarantine tier under which more businesses were allowed to operate at slightly increased capacities.

The government has since then committed to ensure the continued, but gradual reopening of the economy to recover from the pandemic-induced slump.