The Philippine economy shrank by 0.7% in the first quarter, much faster than the initial 0.2% reported on May 7. — REUTERS

By Marissa Mae M. Ramos, Researcher

THE PHILIPPINE ECONOMY in the first quarter declined at a faster pace than previously reported, the Philippine Statistics Authority (PSA) said a day before it announces preliminary figures for the second quarter.

Gross domestic product (GDP) — the value of all finished goods and services produced in the country at a given period in time — fell by 0.7% in the January-March period, faster than the 0.2% drop initially reported on May 7, the PSA said yesterday.

Growth in the services sector was revised downward to 0.6% from the previously reported 1.4%. Meanwhile, the decline in the industry sector was downgraded to 3.4% from three percent.

The services sector slipped 0.6% in the first quarter, slower than the initially reported decline of 1.4%.

Upward revisions in growth rates were noted in the following sub-sectors: wholesale and retail trade (1.9% from 1.1%); repair of motor vehicles and motorcycles (1.9% from 1.1%), public administration and defense; compulsory social activities (5.5% from 5.2%), and education (1.1% from 0.9%).

Meanwhile, downward revisions were noted in the following services sub-sectors: transportation and storage (-11.4% from -10.7%); accommodation and food service activities (-16.4% from -15.3%); information and communication (5.1% from 5.7%); financial and insurance activities (9.1% from 9.6%); real estate and ownership of dwellings (-2.3% from 2.2%); professional and business services (0.2% from 0.7%); human health and social work activities (4.7% from 9.2%); and other services (-10.6% from -7.6%).   

The industry sector’s performance was revised to a 3.4% drop in the first quarter, from the initial 3% slump. Among subsectors posting faster declines were manufacturing (-3.8% from -3.6%), construction (-2.9% from -1.8%); and electricity, steam, water, and waste management (4.9% from 5.3%).

Meanwhile, mining and quarrying recorded a 21% plunge during the period, slightly slower than the previously estimated -22.3%.

The decline in the agriculture, hunting, forestry, and fishing sector was revised to 0.3% from 0.4% initially.

On the expenditure side, growth in government spending was trimmed to seven percent from 7.1%. Exports of goods and services declined by 4.4%, faster than -3% previously.

Likewise, capital formation and imports of goods and services saw revisions to -17.4% (from -18.3%) and -8.7% (from -9%), respectively.

On the other hand, growth in household spending was slightly revised upward to 0.24% from 0.17%.

The first-quarter 2020 revision comes ahead of Thursday’s release of the preliminary estimate for GDP performance in the second quarter.

A BusinessWorld poll of 17 economists yielded a median decline of 11% in the second-quarter GDP.

The government, through the interagency Development Budget Coordination Committee, expects the economy to shrink 2% to 3.4% this year. It is lower than the initial estimate of one percent contraction to flat growth made in March.