Following 84 quarters of uninterrupted growth, the Philippine economy shrank for the first time since 1998 in the first quarter of 2020, the Philippine Statistics Authority reported earlier this morning.
Using the new base year of 2018, the country’s gross domestic product (GDP) declined by 0.2%, a reversal from the expansions of 6.7% and 5.7% in the previous quarter and in the first quarter of 2019.
This marked the first time the economy declined since the three-percent contraction in the fourth quarter of 1998.
The first-quarter result was lower than the 2.9% median estimate in a BusinessWorld poll of 11 economists conducted last week as well as the government’s 6.5%-7.5% target range, albeit this was based on the previous base year of 2000. Economic managers earlier said they are assessing the impact of the coronavirus disease 2019 pandemic and the stringent measures imposed to contain it before revising official targets.
Among major economic sectors, agriculture and industry posted declines of 0.4% and three percent in the first quarter, a turnaround from their respective growth rates of 0.5% and 4.9% in the same quarter last year.
Bucking the trend was services, which grew 1.4% in the first quarter. This was, however, slower than last year’s 7.1%.
On the expenditure side, household spending recorded a flat 0.2% growth, slower than 6.2% in the first quarter of 2019.
Government spending grew by 7.1%, slower than the 17% growth in the previous quarter, but faster than 6.4% in the first quarter of 2019.
Private investment, which is represented in the data as capital formation, posted an 18.3% decline compared to a 9.8% expansion in the same three months last year.
Exports and imports of goods and services also contracted to three percent and nine percent, reversing from their respective growth rates of 4.2% and 8.9% last year.
Gross national income – the sum of the nation’s GDP and net income received from overseas – posted a 0.6% decline in the first quarter compared to growth rates of 5.8% in the previous quarter and five percent in 2019’s comparable three months. – Lourdes O. Pilar