The economy shrank by 16.9% in the second quarter, worse than the preliminary estimate of -16.5%. — PHILIPPINE STAR/MICHAEL VARCAS

By Marissa Mae M. Ramos, Researcher

THE ECONOMY contracted faster in the second quarter than previously estimated, the Philippine Statistics Authority (PSA) reported on Monday.

The PSA said its latest estimate showed Philippine gross domestic product (GDP), which indicates the value of final goods and services produced within a country during a specific period, slumped by 16.9% in the second quarter, faster than the initial 16.5% decline given in August.

The services sector posted a 17% drop in the April-June period, quicker than the initial estimate of -15.8%. Subsectors that posted faster declines based on revised data were real estate and ownership of dwellings (-29.7% from -20.1%); education (-15% from -12.2%); and wholesale and retail trade, and repair of motor vehicles and motorcycles (-13.9% from -13.1%).

Meanwhile, the contraction in the industry sector in the second quarter was revised downward to 21.8% from 22.9%. Slower declines were noted in construction (-30.4% from -33.5%); mining and quarrying (-22.8% from -24.5%); and manufacturing (-20.7% from -21.3%).

Agriculture, forestry, and fishing — the sole major economic sector that posted growth in the second quarter — saw a slight downward revision to a 1.55% expansion from 1.61%.

On the expenditure side, growth in government spending was lowered to 21.8% from the initial 22.1%.

Household consumption was revised to a -15.3% from -15.5% previously.

Exports and imports fell by 35.8% and 37.9%, slower than -37% and -40% previously.

On the other hand, the plunge in gross capital formation was adjusted higher to 53.7% from 53.5%.

The second-quarter 2020 revision comes ahead of today’s release of preliminary estimates for third-quarter GDP.

A BusinessWorld poll of 19 economists yielded a median GDP decline of 9.2% in the third quarter.

The government, through the interagency Development Budget Coordination Committee, expects the economy to shrink between 4.5% and 6.6%, or an average of 5.5% this year.