The second quarter of 2021 may see the end of quarter-on-quarter economic growth eked out since the middle of last year, as the revert to tighter quarantine measures would weaken consumer spending, UK-based Pantheon Macroeconomics said on Monday.
While gross domestic product (GDP) likely inched up 2.2 percent during the January to March period compared to October to December last year, Miguel Chanco, Pantheon Macroeconomics senior Asia economist, said second-quarter GDP could decline by 1.5 percent compared with the first-quarter output.
Following the trough during the second quarter of 2020 due to the most stringent lockdown that stopped 75 percent of the economy, GDP rose 8 percent quarter-on-quarter in the third quarter of last year, followed by 5.6-percent expansion during the fourth quarter.
The slowing quarter-on-quarter increase in output reflected the sluggish reopening of the economy, and it did not help that COVID-19 cases surged last month such that Metro Manila and four neighboring provinces accounting for half of GDP reverted to the strictest enhanced community quarantine for two weeks.
Starting this week, the less stringent modified enhanced community quarantine (MECQ) was imposed in Metro Manila, Bulacan, Cavite, Laguna and Rizal. In a report titled “A Double-Dip in the Philippines is Now Looking Inevitable,” Chanco said “household spending in the Philippines held up better than we expected in the first quarter, compelling an upgrade to our GDP forecast” from only 1 percent quarter-on-quarter previously.
But on a year-on-year basis, Pantheon Macroeconomics projected GDP to have contracted by 3 percent—bigger than the 0.7 percent a year ago and extending the recession to five straight quarters. INQ