An official of the National Economic and Development Authority (NEDA) sees better gross domestic product (GDP) output in the fourth quarter with the gradual reopening of the economy, but this will be still be checked by weak consumer spending for non-essentials.
Philippine GDP contracted by 11.5 percent in the third quarter, which is an improvement over the 16.9 percent registered in the second quarter. First quarter GDP contraction was at 9 percent.
Economic managers forecast full-year contraction to be around 5.5 percent.
NEDA Undersecretary Rosemarie Edillon said in a virtual briefing on Wednesday that economic growth in the fourth quarter “will still be challenging because we still want people to practice social distancing.”
“We’ve seen the worst and we’re starting to recover. The most effective strategy to do this is to re-open the economy,” she said.
For next year, she said economic managers are optimistic for a projected 6.5- to 7.5-percent GDP growth even as the availability of the coronavirus disease 2019 (Covid-19) is towards the end of 2021.
“But we’re hoping that prior to that we would really be used to complying to this minimum health standards and really manage this Covid-19 so that we could go about our work,” she said, adding that availability of the vaccine will boost consumer confidence.
Edillon said any changes on the GDP forecast will be announced in the coming days as economic managers are expected to meet as early as next week to discuss the latest economic developments.
Amid the negative growth prints in the last three quarters, she said “the economy is on the mend.”
“We’ve seen the worst and we’re starting to recover. The most effective strategy to do this is to reopen the economy,” she said.
“But we’re hoping that prior to that we would really be used to complying to this minimum health standards and really manage this Covid-19 so that we could go about our work,” Edillon added.