Q2 GDP growth higher than initially reported – BusinessWorld Online

By Jenina P. Ibañez, Senior Reporter

ECONOMIC GROWTH in the second quarter grew at a slightly faster pace than initially reported, the Philippine Statistics Authority (PSA) said on Monday.

Gross domestic product (GDP) — the value of all finished goods and services produced in the country at a given period — rose by 12% in the second quarter, quicker than the 11.8% preliminary estimate.

Major contributors to the revision were higher growth rates in education (12.6% from 10%), financial and insurance activities (5.2% from 4.2%), and construction (27.1% from 25.7%).

However, the decline in net primary income (NPI) from countries abroad was faster than initially reported at -54.4% from -53.8%.

Gross national income — the sum of the country’s GDP and NPI received from overseas — was revised upwards to 6.8% from 6.6% previously.

Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said the slight upward revision may be attributed to unusually low base effects from the height of mobility restrictions in the second quarter last year compared with more business activity this year.

Measures to reopen the economy benefited the construction sector along with financial and insurance activities, he said in a Viber message.

“The shift and the start of online learning may have benefited the education sector, compared to a year ago,” he added.

ING Bank N.V. Manila Branch Senior Economist Nicholas Antonio T. Mapa said in an e-mail that revisions came mostly from services and construction, reflecting the improved mobility and consumer confidence that led to a quicker pickup in economic recovery.

“The lockdowns and poor sentiment (both consumer and business) have held back expansion, particularly in the services sector. This development also manifests in the recent labor market data that shows most of the challenges faced by the labor force are in services that oftentimes require face to face interaction,” he said.

The preliminary estimate for the third-quarter GDP will be released today (Nov. 9).

A BusinessWorld poll of 18 analysts yielded a GDP growth estimate of 4.7% in the third quarter, lower than the 12% jump in the second quarter of 2021 and a turnaround from the 11.4% decline in the third quarter last year.

The government cut its economic growth target for 2021 to 4-5% from 6-7% previously.

Mr. Ricafort said the data revision for the second quarter could have a slight positive impact on GDP growth estimates for the succeeding quarters as well as the full-year economic growth rate.

An economic rebound and curbing coronavirus disease 2019 (COVID-19) infections go hand in hand, Mr. Mapa said.

“Cutting corners and rushing reopening without properly addressing the healthcare crisis oftentimes leads to costly reversal in quarantine restrictions as COVID-19 infections surge,” he said.