PH economy slips into recession

THE Philippine economy slipped into “technical recession” in the second quarter of 2020, contracting by 16.5 percent, the lowest recorded quarterly growth since 1981, as the lockdown imposed to control the spread of the coronavirus disease 2019 (Covid-19) took its toll on industries, the Philippine Statistics Authority (PSA) reported on Thursday.

A technical recession is when the gross domestic product (GDP) contracts for two consecutive quarters.

The decline in GDP in the second quarter is far worse than the -0.7 percent in the first and a reversal from the 5.4 percent growth in the second quarter of 2019.

It also exceeded the -11 to -14 percent projection of economists earlier polled by The Manila Times.

The agriculture sector grew by 1.6 percent in the second quarter, up from the 0.7 percent posted in the same period last year.

Industry, on the other hand, plunged by 22.9 percent from 2.5 percent while services contracted by 15.8 percent from 7.5 percent in 2019.

On the expenditure side, declines were seen in household final consumption expenditure, which dropped by 15.5 percent; gross capital formation (-53.5 percent); exports (-37.0 percent); and imports (-40 percent).

On the demand side, only government final consumption expenditure and breeding stocks and orchard development posted positive growth rates in the second quarter of 2020 with 22.1 percent and 2.2 percent, respectively.

Net Primary Income (NPI) from the Rest of the World and Gross National Income (GNI) both declined by 22.0 percent and 17.0 percent respectively.

Source: TheManila Times