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The Philippine economy continued to contract in the third quarter of the year, but at a slower pace compared to the sharp decline in the second quarter, the Philippine Statistics Authority (PSA) reported on Tuesday.
The country’s gross domestic product (GDP) contracted by 11.5 percent, an improvement over the -16.9 percent contraction in the second quarter of the year, but a 6.0 percent reversal recorded in the third quarter of 2019.
The third-quarter decline also beat the -7.1 to -11.4 percent projection of economists previously surveyed by The Manila Times.
Net primary income (ISN) of the rest of the world and gross national income (GNI) decrease by 28.2% and 13%, respectively.
The agricultural sector grew 1.2 percent in the third quarter, down from 3.0 percent in the same period last year.
Industry, however, slumped 17.2 percent from the 5.4 percent expansion a year ago due to the drop in manufacturing and construction.
Services also contracted 10.6 percent from 7.3 in 2019 due to declines in owned and owned housing, accommodation and food service activities, wholesale and retail trade, vehicle repair motor and motorcycle, transportation and storage, education, professional and business services. and human health and social work activities.
Household final consumption spending contracted 9.3 percent, while government final consumption spending fell to 5.8 percent from 8.8 percent a year ago.
National Statistician Claire Dennis Map in a briefing said that given the double-digit economic contraction in the third quarter, the government’s forecast of -5.5 percent of GDP for this year is no longer achievable.
He said that to achieve this, the economy would have to grow at least 6.6 percent in the fourth quarter of the year.
“The double-digit contraction in the third quarter is not surprising given the return to stricter quarantine measures in NCR (National Capital Region) and neighboring provinces, and Cebu City, which together account for about 60 percent. percent of the Philippine economy, “Finance Secretary Carlos Domínguez 3, Acting Secretary of Socioeconomic Planning, Karl Chua, and Budget and Management Secretary Wendel Avisado, said in a joint statement.
They form the economic team of the government.
“Also, public transportation was restricted. This prevented many Filipinos from leaving their homes and reporting to work even if they were allowed to operate their industries, ”they added.
Chua solo, for his part, revealed that the inter-agency Development Budget Coordination Committee (DBCC) will meet soon to re-evaluate the latest figures and see if it is necessary to adjust the projections for the entire year.
“When the DBCC met in July to propose the budget projections, the range was up to, I think, a 6.6 percent contraction. As I mentioned, immediately after this, the DBCC will start to reassess where we are and we will report it as soon as we have done the reassessment, given the latest figures, “he said.
Chua expressed his hope that the reopening of the economy will have a positive impact on GDP in the fourth quarter, and further noted that the government is capitalizing on progress in the health system, in particular, better tests, contact races and strategy of treatment.
However, he admitted that preliminary data shows that the four recent typhoons have caused about P38.8 billion in damage, equivalent to 0.21 percent of the country’s GDP.
“Our GDP is almost P18 trillion. So, when we put them all together, the impact on the country’s growth rate in a preliminary way is a reduction of about 0.055 percentage points. So I think this is a manageable level. The important thing is that we accelerate the recovery, so that more people reintegrate after the disaster phase, ”said Chua.
Congress asked to do its part
As the government intensifies its efforts to help the economy recover, the economic team is hopeful that Congress will do its part to help the economy recover faster by passing recovery bills pending during the year.
These are the General Appropriations Act of 2021 (GAA), the Corporate Recovery and Tax Incentives for Businesses Act (Create), the Unified Initiative of Government Financial Institutions for Troubled Businesses for Economic Recovery (Guide) and the Strategic Transfer of Financial Institutions (FIST) Act.
Create will reduce corporate income tax directly from 30 to 25 percent as soon as it becomes effective. This will be the largest stimulus package for businesses, primarily benefiting micro, small and medium-sized enterprises (MSMEs) that comprise 99 percent of businesses and employ more than 60 percent of Filipino workers.
FIST will help banks get rid of bad loans and assets so they can free up money and capital to extend more credit, especially to small businesses. Meanwhile, Guide will provide equity support to strategically important companies facing insolvency.
“All three bills are important elements of the recovery program to address the specific needs of businesses. Finally, the 2021 budget will provide us with some of the strongest tools needed to rebuild our economy. Timely approval of this bill is crucial to help achieve the GDP growth target of 6.5 to 7.5 percent for next year, ”said the economic team.
“With an infrastructure budget amounting to P1.121 trillion, about 1.7 million jobs can be created. With its high multiplier effect, the Build, Build, Build program will play a critical role in our economic recovery. A delay in the approval of the budget will be detrimental to our recovery. Each day of delay will result in P1.100 million pesos not spent ”, added the economic team.
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