The Philippines’ gross domestic product (GDP) declined for the fifth consecutive quarter, prolonging the recession caused by the coronavirus disease 2019 (COVID-19) pandemic.
The 4.2 percent contraction in the first quarter of 2021 is, however, an improvement from the negative growth rates in the previous three quarters.
The Philippine Statistics Authority (PSA) reported GDP growth at -8.3 percent in the fourth quarter, -11.6 percent in the third quarter, and -17 percent in the second quarter of 2020.
In a statement, the government’s economic team said the economy actually grew by 0.3 percent on a seasonally-adjusted quarter-on-quarter basis.
“The latest GDP performance is consistent with the recovery in the labor market. The relaxation of quarantine restrictions while adhering to the minimum health standards enabled millions to regain their jobs and income sources in the first quarter,” the economic managers said in a statement posted on the National Economic and Development Authority website.
“As of March 2021, we surpassed pre-COVID employment by 2.8 million jobs, as the labor force participation rate improved to 65 percent and the unemployment rate fell to 7.1 percent, the lowest since the height of the pandemic,” they added.
They also noted that the underemployment rate also decreased from 18.2 percent in February 2021 to 16.2 percent in March 2021, reflecting the improvement in the overall quality of jobs.
The economic team is sticking to its growth projection of 6.5 to 7.5 percent for 2021.
“Our economy may slow down in early 2021 given recent developments, but we will not backpedal. The country’s strong economic position before the pandemic and improving economic data in recent months point to an economy that is on the mend,” the team said.
In its report, the PSA said the main contributors to the decline were: construction, -24.2 percent; other services, -38.0 percent; and real estate and ownership of dwellings, -13.2 percent.
The contributors to growth were: financial and insurance activities, 5.2 percent; public administration and defense; compulsory social activities, 7.5 percent; and human health and social work activities, 11.7 percent.
Other industries which managed to grow during the period were: information and communication, 6.3 percent; manufacturing, 0.5 percent; and electricity, steam, water, and waste management, 1.9 percent.
Among the major economic sectors, the biggest decline was posted by Industry at -4.7 percent, followed by Services at -4.4 percent, and Agriculture, Forestry, and Fishing (AFF) at -1.2 percent. (Ventures Cebu)