Q2 GDP Is Expected To Be Up By More Than 10 Percent
The country’s chief economist said in an interview that the country’s gross domestic product (GDP) likely grew by more than 10 percent year-on-year in the second quarter. He credited this to the low base last year and the much better management of risks during the recent surge in COVID-19 cases.
According to Socioeconomic Planning Secretary Karl Kendrick Chua, based on the latest preliminary economic data, a double-digit or above 10-percent GDP growth was “doable” in the second quarter. This report is scheduled for release by the government on Aug. 10.
The pandemic-induced recession had extended up to the first quarter of 2021 when the GDP shrank by 4.2 percent year-on-year. Chua is “hopeful” for a better outturn which is a revert to year-on-year growth in output which was last seen in the fourth quarter of 2019.
The five straight quarters of year-on-year decline is expected to end in the second quarter, partly due to base effects as GDP slid by a record 16.9 percent a year ago at the height of the enhanced community quarantine (ECQ), which put 75 percent of the economy to a halt from mid-March to May 2020.
Chua noted that prospects for the second half of the year are good if they are able to do three things: manage risks and open the economy, implement the entire recovery program, and vaccinate more and more. In a separate interview, he also said that the government did not make the mistake of locking down a big part of the economy from March until mid-May this year.
This year, the government is aiming for a 6 to 7 percent GDP growth after last year’s worse recession where the output contract by 9.6 percent.
Meanwhile, Oxford Economics assistant economist Makoto Tsuchiya said in a separate interview via email that he projected the Philippine GDP to have grown by 12.7 percent year-on-year in the second quarter.
According to Tsuchiya, they have upgraded their year-on-year growth forecast in the second quarter, from 12 percent previous to 12.7 percent, because data suggested that the economy held up better than expected despite a two-week partial lockdown from late March.
On the other hand, the Institute of International Finance (IIF) associate economist Yuanliu Hu’s forecast is 13.4 percent. Overall, the IIF expects the GDP to grow by 5.5 percent for the entire 2021. Head added that the condition in the second half of this year should improve, with the vaccination program speedup.