GDP revisions trim growth to 6.9% in Q3

MANILA, Philippines — Revisions in gross domestic product (GDP) data in the third quarter of 2021 brought down the economy’s growth rate to 6.9 percent, the Philippine Statistics Authority (PSA) reported yesterday.

GDP adjustments are regularly done as a consideration to the late release or updates of some pertinent data. It is also consistent with international standard practices on national accounts revisions.

The PSA said GDP, a measure of economic output, grew by 6.9 percent in the July to September 2021 period, lower than the 7.1 percent growth reported in November.

Still, the third quarter performance managed to beat expectations as the country went back into lockdown during the period amid the surge in COVID cases due to the Delta variant.

The PSA and the National Economic and Development Authority will announce today (Thursday) the fourth quarter and full year GDP performance.

Economists expect GDP to hit government’s revised full-year target of five to 5.5 percent on the back of a better fourth quarter performance.

According to the PSA, the major contributor to the revision was financial and insurance activities, which was downgraded from 6.4 percent to 3.9 percent.

Rizal Commercial Banking Corp. chief economist Michael Ricafort said this could be attributed to the increase in long-term interest rates and bond yields that could have reduced trading incomes.

“Relatively higher non-performing loan ratio as well as slower growth in the demand for loans and credit could have also partly reduced the growth in financial services during the quarter,” he said.

Professional and business activities also went down to 10.6 percent from the previously reported 11.5 percent. The same with real estate and ownership of dwellings at 3.8 percent from a 4.7 percent hike in November.

Ricafort said this is still related to the imposition of hard lockdowns in Metro Manila and nearby provinces that reduced business activities during the quarter.

“The resulting losses of jobs and income and some business closures due to the lockdown could have also partly led to the downward correction in the GDP data,” he said.