Gov’t numbers: PH out of recession as economy grows by 11.8 percent in Q2

MANILA, Philippines—The Philippines in the second quarter of 2021 exited its longest recession since the 1980s’ debt crisis as gross domestic product (GDP) grew 11.8 percent year-on-year, the government reported on Tuesday (Aug 10).

The year-on-year growth in second-quarter GDP, however, was mostly a result of the low base in 2021, when the economy shrank by a record 16.9 percent from April to June compared to pre-pandemic output, no thanks to the most stringent enhanced community quarantine (ECQ) imposed from mid-March to May 2020, which froze 75 percent of the economy.

In 2020, the Philippines posted its worst annual GDP drop of 9.6 percent due to prolonged quarantine restrictions and meager financial support to badly hit sectors.

The second-quarter growth ended the five-straight quarters of recession which started in the first quarter of 2020. GDP shrank by 3.9 percent year-on-year during the first quarter of 2021.

However, the second-quarter GDP was 1.3-percent smaller than the first-quarter output as National Capital Region (NCR) Plus — Metro Manila and four neighboring provinces accounting for half of the economy — reverted to ECQ for two weeks in April after COVID-19 cases surged.

The government targets economic growth of 6-7 percent this year expecting a reopening of the economy and more vaccinations.

But many private sector economists say the more contagious Delta strain of SARS Cov2, the virus causing COVID-19, posed a threat to Philippines’ economic recovery.

TSB