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Philippines Q3 GDP shrinks 11.5 pct

Christian Fernsby |
The Philippine economy shrank by 11.5 percent in July to September from the same period last year as the country gradually reopens the economy while grappling with the coronavirus disease pandemic, the Philippine Statistics Authority (PSA) said on Tuesday.

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Topics: PHILIPPINES   

The industries that contributed the least to the GDP were construction, -39.8 percent; real estate and ownership of dwellings, -22.5 percent; and manufacturing, -9.7 percent, PSA head Dennis Mapa said in an online briefing.

On the other hand, Mapa said the top three industries that posted positive growth were financial and insurance activities, 6.2 percent; public administration and defense, compulsory social activities, 4.5 percent; and agriculture, forestry, and fishing, 1.2 percent.

"The smaller gross domestic product (GDP) contraction of 11.5 percent in the third quarter from a contraction of 16.9 percent in the second quarter indicates that the economy is on the mend," Socioeconomic Planning Secretary Karl Kendrick Chua said in an online news conference.

Chua said the double-digit contraction in the third quarter is not surprising given the return to more stringent quarantine measures in the National Capital Region or Metro Manila and neighboring provinces, and Cebu City in the central Philippines, which together account for around 60 percent of the Philippine economy.

Chua said the third quarter of 2020 "saw the country dance with the virus: two steps forward and one step back," referring to the prolonged coronavirus lockdown measures imposed in mid-March to arrest the virus spread.

"The path is clearer to a strong bounce-back in 2021," Chua said, expressing optimism that "the worst is over for the country."

The Asian Development Bank (ADB) forecast the Philippine economy to contract by 7.3 percent in 2020 before growth returns to 6.5 percent in 2021, while the government is forecasting a more modest contraction of between 4.5 percent and 6.6 percent.

The Philippines continues to grapple with rising coronavirus disease (COVID-19) infection despite nearly eight months of strict lockdown, the longest in the world, that shut the economy.

The Philippines is gradually easing the restrictions in the fourth quarter to allow more people to safely return to work while complying with the minimum health standards.

The Duterte administration expects the economy to bounce back as mobility restrictions are further relaxed.

The Philippines now has 398,449 confirmed coronavirus cases, including 7,647 deaths and 361,784 recoveries.