PH economy shrank 16.9% in Q2, deeper than initially reported

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(FILE PHOTO)

Metro Manila (CNN Philippines, November 9) — The second quarter economic slump was deeper than initially reported, with the Philippine Statistics Authority now recording a 16.9% contraction to hit a fresh all-time low.

The PSA announced the revisions on Monday. The revised figure is steeper than the 16.5% fall reported in August, which was already the worst since available records in 1981.

With the changes, the economy has tumbled by 9.3% as of end-June.

READ: Gov't sees PH economy shrinking by 5.5% in 2020 with deeper slump, return to MECQ

The economy suffered the biggest blow due to the global COVID-19 pandemic, which has forced the country to impose strict lockdowns and cut off local and international tourism to prevent further infections.

Additional data received by the agency revealed that the gross domestic product shrank deeper due to changes in data on real estate and ownership of homes and weaker wholesale and retail trade figures. Declines from value-adding output on repairs of motor vehicles as well as on finance and insurance also led to the steeper downturn, data showed.

Earlier, the PSA also revised the first quarter GDP data to a 0.7% dip from a 0.2% initial decline.

Government spending was the only segment which substantially grew between April-June versus a year ago. Household consumption – the backbone of the economy – emerged as the biggest dampener as lockdowns kept people at home and spent less.

The government will report latest economic data for the third quarter on Tuesday. A CNN Philippines poll among economists pointed to a -9% average estimate, which confirms expectations that the Philippines will remain in recession but at a tamer pace. If realized, this will mark the third straight quarter of contraction.

Trade and employment figures have since improved, Acting Socioeconomic Planning Secretary Karl Kendrick Chua pointed out in a speech before the Philippine Economic Society. However, limited ridership on public transport due to social distancing has been keeping thousands of Filipinos away from their jobs.

The Inter-Agency Task Force for the Management of Emerging Infectious Diseases has since relaxed stay-at-home rules and is now telling people to head out to shop, dine, and travel with caution, hoping to revive the economy as local cases near 400,000.

READ: Uncontrolled PH COVID-19 outbreak to cause deeper 6.9% economic slump, create 'new poor' – World Bank