MANILA, Philippines – The Philippine economy shrank by more than expected in the first quarter of the year, according to government data released on Tuesday, as prolonged community quarantines due to the pandemic hamper reopening efforts.
The Philippine Statistics Authority (PSA) reported that the country’s gross domestic product (GDP) fell -4.2 percent in the first quarter from a year earlier.
This is the fifth consecutive quarter that the country has posted negative GDP growth due to the coronavirus pandemic.
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).
Among the major economic sectors, Agriculture, Forestry, and Fishing (AFF) declined by -1.2 percent in the first quarter of 2021. Likewise, Services and Industry contracted by -4.4 percent and -4.7 percent, respectively during the period, the PSA noted.
“On the demand side, Household Final Consumption Expenditure (HFCE) declined by -4.8 percent, along with the following items: Gross Capital Formation (GCF), -18.3 percent; Exports, -9.0 percent; and Imports, -8.3 percent,” the agency said.
The net primary income (NPI) from the rest of the world continued to decline by -75.8 percent, bringing the Gross National Income (GNI) to drop by -10.9 percent during the period, it added.
On the other hand, the PSA said that government final consumption expenditure (GFCE) grew by 16.1 percent in the first quarter of 2021.
Contributors to growth were led by 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 that 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, the PSA said.
The National Economic Development Authority (NEDA) said the aversion to risk for most of 2020 has placed the country in a long period of quarantine, and that this came at a huge cost to the economy and the people.
It, however, observed some improvements as the rate of contraction has slowed, and that the country has time to catch up with on its growth target of 6.5 to 7.5 percent despite the pandemic-induced quarantine restrictions.