The Philippine economy is making a comeback as it grows slowly but surely. Its gross domestic product (GDP) climbed 7.1% year-on-year during the third quarter. Even though it’s slower than the second quarter, it’s still beyond expectations.
From July to September, goods and services output was also 3.8% higher than the April to June output. The government is aiming for 4-5 percent GDP this year. Socioeconomic Planning is optimistic that the country can attain this based on the third-quarter result.
“Our progress in the third quarter shows that the recovery is accelerating, and it is very likely that we will hit or even exceed the high-end of our growth target for 2021. Of course, this entails everyone’s cooperation, it entails managing the risk better and moving forward towards Alert Level 1 by the end of the year or early 2022,” said Socioeconomic Planning Secretary Karl Kendrick Chua.
Expected Q3 Slower Growth in Philippine Economy
Analysts are expecting lower growth for this year’s third quarter. The second quarter rose to 12%, because of the low-base effect. It was due to the most rigid enhanced community quarantine (ECQ). The government imposed it from the middle of March to May 2020.
The third-quarter GDP was outstanding compared to an –11.6% reduction in the same period of last year. It is because of the extended COVID-19 lockdowns, stopping some economic activities. However, it’s lower compared to the 12% in the second quarter of 2021. Base effects chiefly determine it. The year-to-date growth is at 4.9% at the moment.
The Philippines’s GDP must increase to 5.3% amid the fourth quarter. It is to reach the high-end of the 4-5% growth target for 2021. It should also meet the 1.7% to attain the lower-end of the goal.
Chua noted that the Philippine economy’s expansion indicates continuous recovery regardless of two weeks ECQ. It also includes a month of Modified Enhanced Community Quarantine (MECQ) in the country’s economic centers.
The government must hasten and extend the vaccination program to achieve herd immunity. It plans to reopen to Alert Level 1 by January of next year. At the same time, it will make the most of this year’s budget to revive the Philippine economy.
In terms of expenditure, Chua said that the growth was because of household consumption. It advanced by 7.1% and constituted 5.2% of total GDP growth. He cited that the strong ricochet illustrates the improvement in consumer confidence. The government is expecting this economic condition to last in the fourth quarter. Hopefully, it will because of eased restrictions and higher inoculation rate.
Agricultural Production Declines in Third Quarter
Although the country’s GDP increased in the third quarter, the agricultural output is not so lucky. It contracted on a yearly 2.6%. Productions of fisheries, livestock, and crops decreased because of inclement weather. It includes heavy rains and storms accompanied by flooding that destroyed tons of rice and vegetables.
According to the Philippine Statistics Authority (PSA), the agriculture and fisheries production value declined by 2.6%. It occurred during the July-September period, which is a turnabout of a year ago’s 0.7% growth. Additionally, the slump is higher compared to the -1.5% recorded in Q2.
Generally, agricultural production constitutes nearly 10% of the total economic output and a fourth of the country’s occupations. The production value in the agriculture sector reduced by 2.5%, which is poorer than 0.2% from last year’s record.
Unmilled rice (play) production rose by 6.7%, while corn production dropped to 18.6%. Much of the farm losses are due to past typhoons that visited the country.
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