Ocean excitement fell in the fifth third quarter of epidemic-induced lockdowns and was worse than expected.
The Philippine economy shrank more than expected in the first quarter of 2021, with the central bank backing a record low in interest rates at a policy meeting on Wednesday.
Gross domestic product fell 4.2 percent in the March quarter from a year earlier, the statistics agency said on Tuesday, the fifth-third of an epidemic-induced lockdown.
In a Reuters poll, economists expected GDP to contract at 3 percent, down from 6.3 percent in the previous quarter.
The Philippines is expected to conduct the slowest recovery in Southeast Asia this year from an epidemic-driven recession. The return to tightening controls in Manila and other key economic sectors has threatened the government’s goal of at least .5.5 percent growth this year – it’s up for review now. It is also expected to continue unemployment, which has not yet improved enough.
“The challenge right now is to restore business and consumer confidence,” said Dan Ross, chief economist at the Security Bank Corporation in Manila. “At this pace, the Philippines could soon return to pre-epidemic GDP levels in the second half of 2022.”
Among the major economic sectors, agriculture declined by 1.2 per cent and services and industry by 4.4 per cent and 4.7 per cent, respectively.
In terms of demand, household spending shrank by 4.6 percent, but government spending rose by 16.1 percent.
The performance of the economy, however, has improved on a consistent basis, with quarterly adjusted terms up 0.0 percent over the previous quarter.
“The strong economic position of the country before the epidemic in recent months and the improvement in economic data indicate that an economy is improving,” Carl Chua, secretary of economic planning, said in a briefing.
The Southeast Asian country is battling one of the worst coronavirus outbreaks in Asia, with more than a million cases and more than 18,000 deaths since last year.
According to a Reuters poll of 13 economists, the economic downturn is expected to persuade the central bank to keep interest rates unchanged at 2 percent on Wednesday, the fourth consecutive meeting of the central bank.
Some economists expect the rate to remain unchanged for the rest of 2021 due to the supply of pork, despite the fact that high inflation has exceeded its 2 percent-4 percent target band.