2020 GDP Shrink Rate Up 9.6% After Updated Data Submissions

After data revisions made by the Philippine Statistics Authority (PSA), it’s been observed that the economy contracted by 9.6% in 2020, slightly higher than the earlier estimate of 9.5% reported in January.

This corresponds to a higher shrink rate for the country’s gross domestic product (GDP), a necessary gauge of economic output. Economic losses in 2020 were initially estimated at ₱1.54 trillion, which later increased to ₱ 1.58 trillion after the data was revised.

Due to the outbreak of the global pandemic in the previous year, coupled with strict nationwide lockdowns and restrictions in mobility, the country’s economic performance was at its worst in decades. This was exacerbated by a succession of natural disasters and delays in budget execution.

The Philippines also suffered the sharpest decline compared to other economies in the region. Revisions on the estimates were made based on the updated data submissions by data source agencies.

For the fourth quarter of 2020, GDP remained at 8.3%. The government has set its GDP forecast at 6.5 to 7.5% for 2021, targeting to return to growth territory. Various international think thanks have also lowered their GDP projections for the Philippines.

The Japan Center for Economic Research had the lowest projection after it slashed the growth forecast from 5.9% to 5.2%.

The World Bank also cut its forecast from 5.9% to 5.5%. Singapore-based ASEAN+3 Macroeconomic Research Office expected GDP to grow 7.4% in January, which was subsequently lowered to 6.9%.

IHS Marikit, a market intelligence firm, projects a 7.4% increase. Capital Economics, a London-based think tank, has the most optimistic outlook at 9.5% growth.

Source: Philstar