Economy collapses slightly softer than thought in Q3
MANILA, Philippines — The economy’s crash last quarter was slightly softer than originally estimated, state statisticians said on Wednesday.
Gross domestic product (GDP), the sum of all products and services created in an economy, collapsed a revised 11.4% year-on-year in the 3 months ending September, a tad better than the 11.5% contraction reported last November.
The latest figure takes into account a larger set of data that include those belatedly reported by agencies and therefore were not considered in computing initial GDP numbers. Revisions are typically made by the Philippine Statistics Authority to better reflect the state of the economy.
In the third quarter, data showed the largest adjustment that altered GDP numbers came from the property sector which fell 19.4% year-on-year, slower than the preliminary 22.5% decline. The value of education sector also turned out to have contracted way less than before at 17.8% now from the original 21.4%.
The so-called “other services” in economic metrics eased their slump to 49.9% year-on-year from 53.4% initially calculated in the third quarter. PSA will report preliminary fourth quarter and 2020 full-year GDP on Thursday.
Nonetheless, the slight upward adjustment in third quarter GDP did not materially change the economy’s general course last year. From January to September, Philippine GDP still shrank 10% on an annual basis.
Moving forward to this year, London-based Oxford Economics expects the Philippines to join Vietnam as economic outperformers in the Asia Pacific, although the former’s rebound is likely to be shallow and mainly a result of low base from last year’s massive meltdown.
This essentially means that because GDP shrank drastically last year, any succeeding growth is bound to read stronger, but that does not mean completely recouping last year’s losses. The Duterte government assumed GDP to have contracted between 8.5-9.5% in 2020, followed by growth of 6.5-7.5% this year.
Yet according to Oxford Economics, if vaccine rollout proves faster than expected, the Philippines is among economies likely to benefit from faster recovery.
“We even expect restrictions to ease in the Philippines, despite the expectation that only 35% of its population will be vaccinated by the end of the year, as it experienced one of the strictest and more prolonged lockdowns in the region,” the think tank said in a report.
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