GDP sinks by deeper 9.6% in 2020 after data revisions

MANILA, Philippines — The economy contracted by a slightly higher 9.6 percent in 2020 from an earlier estimate of 9.5 percent after data revisions by the Philippine Statistics Authority (PSA)

The PSA said the country’s gross domestic product (GDP), a measure of economic output, shrank by a higher rate than the earlier figure reported in January based on revised estimates of the National Accounts of the Philippines.

The revised GDP translates to P1.58 trillion in economic losses from the initial estimate of P1.54 trillion.

The country’s economic performance last year was its worst in several decades and was also the sharpest among the largest economies in the region.

This was due to uncontrolled COVID-19 outbreak combined with strict nationwide lockdowns and mobility restrictions, a succession of natural disasters, and delays in budget execution which weighed on public investment.

GDP for the fourth quarter of 2020 remained lower at 8.3 percent.

Revisions on the estimates are based on the updated data submissions by the data source agencies. It is also consistent with international standard practices on national accounts revisions.

For 2021, the government is targeting to slowly return to growth territory with its GDP forecast set at 6.5 to 7.5 percent.

Several international think tanks have also downgraded their GDP projection for the Philippines.

The lowest came from the Japan Center for Economic Research which cut its GDP growth forecast to 5.2 percent from 5.9 percent.

Washington-based World Bank also slashed its forecast to 5.5 percent from 5.9 percent.

Likewise, Singapore-based ASEAN+3 Macroeconomic Research Office expects GDP to grow 6.9 percent this year, much lower than its 7.4 percent projection last January.

Market intelligence firm IHS Markit sees a 7.4 percent increase while London-based think tank Capital Economics is looking at a 9.5 percent growth.