THE ECONOMY grew faster than previously estimated last year using 2018 as the base year in measuring the country’s gross domestic product (GDP), the Philippine Statistics Authority (PSA) reported on Monday.
Using 2018 as the base, Philippine GDP growth averaged six percent in 2019, a tad faster than the 5.9% previously reported in January that used 2000 prices.
Growth in the fourth quarter was revised upwards as well to 6.7% from 6.4% previously.
On the expenditure side, household consumption growth last year was scaled up to 5.9% from 5.8% using 2000 as the base year. Likewise, gross capital formation growth in 2019 was revised to 2.5% from a 0.6% decline.
On the other hand, government spending growth was revised to 9.6% last year, down from the previously reported 10.5%.
The growth in the exports and imports of goods and services were also downscaled to 2.4% (from 3.2%) and 1.8% (from 2.1%), respectively.
On the production side, the new base year led to upward growth revisions in the services sector in 2019 at 7.5% from 7.1% using 2000 prices.
On the other hand, industry and agriculture, forestry and fishing grew by 4.7% (from 4.9%) and 1.2% (from 1.5%), respectively.
According to a note provided by the PSA titled “Primer on the overall revision and reading to 2018 of the Philippine System of National Accounts,” rebasing is a process of replacing an old base year with a more recent one.
“The base year provides the reference to which future values of GDP are compared,” the PSA primer read.
Using an outdated base could mean the growth of an economy may be underestimated as new industries may not be captured by the old method.
The overall revision and rebasing to the 2018 base year include new industries such as information and communication; accommodation and food services; education; and human health and social work activities.
It also added expenditure components such as “valuables” under gross capital formation and “newly highlighted export and import commodities.”
Prior to the 2018 base year, the country’s national accounts have undergone four overall revisions — 1968 (from base year 1955 to 1967), 1973 (from base year 1967 to 1972), 1995 (from base year 1972 to 1985), 2011 (from base year 1985 to 2000).
The preliminary results of the first-quarter 2020 economic performance, which will henceforth be using the 2018 base year, is scheduled to be released on May 7. — LOP