Pandemic more damaging to economy in 2020 than thought
MANILA, Philippines — The economic damage from the coronavirus pandemic last year was greater than originally reported, state statisticians said Thursday.
Gross domestic product (GDP), the sum of all products and services created in an economy, actually shrank at 9.6% on-year for the entire 2020, slightly worse than the 9.5% initially reported last January.
The contraction was compounded by a faster growth rate in 2019. GDP at the time expanded 6.1% annually under revised calculations, a little better than 6% originally. With 2019 faster and 2020 contraction worse, economic output lost a larger P1.58 trillion from initially estimated losses of P1.54 trillion last year.
Meanwhile, the slump in GDP in the fourth quarter of 2020 was maintained at 8.3% year-on-year.
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.
According to official data obtained by Philstar.com, revisions in the 2020 figures were a result, in part, by slower decline in construction and manufacturing offset by a deeper drop in services. The assessment on agriculture stayed from January levels.
The Duterte administration was hoping for a quick turnaround to 6.5-7.5% growth this year, but that target is now under threat by renewed restrictions in Metro Manila, the center of business and commerce, as well as four nearby urban areas that are also responsible for a large chunk of GDP every year.
Economic managers are set to meet to revise their projections.
Sought for comment, Miguel Chanco, senior Asia economist at Pantheon Macroeconomics, a UK-based think tank, believes a double-dip recession this year “can’t be ruled out.”
“As things stand, things unfortunately are playing out in line with our expectations; we said back then that the mere tightening of GCQ rules wouldn’t be enough, and that stricter rules that would run for much longer are likely, eating more into the economy’s performance in Q2 (second quarter),” Chanco said in an email.
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