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Philippine economy sank 8.3% in fourth quarter and 9.5% in 2020

The Philippine economy sank 9.5 percent in 2020, despite the shallower contraction of 8.3 percent in the fourth quarter on the prolonged impact of the health crisis, data from the Philippine Statistics Authority show.

"The Philippine gross domestic product posted a growth rate of -8.3 percent in the fourth quarter of 2020, resulting in the -9.5 percent full-year growth rate for 2020," the PSA said in a statement Thursday morning.

Data showed the fourth-quarter GDP decline improved from the revised 11.4-percent contraction in the third quarter.  It was, however, a reversal of the 6.7-percent expansion recorded in the fourth quarter of 2019.  GDP grew 6 percent in the whole of 2019. 

The gross national income also decreased by 12 percent in the fourth quarter and 11.1 percent in the whole of 2020, after the net primary income from the rest of the world went down by 53.2 percent in the fourth quarter and by 27.3 percent in 2020.

The fourth-quarter GNI decline of 12 percent also slightly eased from the 13-percent drop in the third quarter.

The PSA said all three major economic sectors registered declines in the fourth quarter and the whole of 2020.

National Statistician and Civil Registrar General Dennis Mapa said the agriculture, forestry and fishing sector contracted 2.5 percent in the fourth quarter from a year ago, while services and industry shrank 8.4 percent and 9.9 percent, respectively.

This brought the full-year growth of AFF at -0.2 percent; services, -9.1 percent; and industry, -13.1 percent.

It said the biggest contributors to the decline of the GDP growth in the fourth quarter were construction at -25.3 percent;  other services at -45.2 percent;  and accommodation and food service activities at -42.7 percent.

Higher government spending was not enough to lift the whole economy last year.  Data showed that while the government final consumption expenditure grew 4.4 percent in the fourth quarter, household final consumption expenditure declined by 7.2 percent.  The gross capital formation tumbled 29.0 percent;  exports,  10.5 percent;  and imports, -18.8 percent.  

The PSA said that for the whole 2020, government spending grew by 10.4 percent while household spending declined 7.9 percent.  Gross capital information sank 35.8 percent; exports, -16.7 percent; and imports, -21.9 percent.

The interagency Development Budget Coordinating Committee earlier announced the revision of the 2020 GDP target to a range of -8.5 to -9.5 percent, deeper from the previous estimate of -5.5 percent.

The DBCC expects GDP to bounce back by 6.5 percent to 7.5 percent in 2021 and 8 to 10 percent in 2022.

Topics: Philippines GDP , -8.3% fourth quarter , -9.5 percent 2020 , contraction
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