All household expenses fell in the fifth quarter directly within the effects of the epidemic and were worse than expected.
The Philippine economy fell sharply than expected in the first half of 2021, in line with a suggestion that the central bank keep interest rates at a third meeting on Wednesday.
Domestic revenues fell 4.2% in the March quarter since last year, the Statistics Agency said on Tuesday, citing a fifth-fifth drop in the middle of a pandemic outbreak.
Economists on a Reuters survey were expecting GDP to gain 3% after falling 8.3% year-over-year in the last quarter.
Philippines is expected to address a slight decline in Southeast Asia this year from the economic downturn caused by the epidemic. The return to extreme conditions in Manila and other key economic areas threatens the government’s target – which is expected to be enlightened – by 6.5% growth this year. He is also expected to initiate unemployment, which is still showing significant changes.
“The challenge now is to restore business and consumer confidence,” said Dan Roces, chief financial officer at Security Bank Corp in Manila. “In the meantime, the Philippines could return to GDP, which began in the second half of 2022 earlier.”
Of the major economic sectors, agriculture fell by 1.2% while employment and industry were given 4.4 percent and 4.7 percent, respectively.
On the demand side, household spending fell 4.8 percent, but government spending increased by 16.1%.
Economic performance, however, has improved steadily, growing by 0.3% from the previous quarter on climate change.
“The economic downturn in the country prior to the epidemic and the economic downturn in recent months are a reflection of the forthcoming economic transformation,” Secretary of Economic Planning Karl Chua said at the conference.
The Southeast Asian country is battling one of the biggest corruption scandals in Asia that has killed more than one million people and 18,000 more since last year.
The economic downturn is expected to force the central bank to adjust its interest rate to 2% on Wednesday for the fourth consecutive meeting, according to all 13 economists in a Reuters survey.
Some economists also expect the BSP to keep prices unchanged for the whole of 2021, despite high inflation which has broken the 2% – 4% resistance mainly due to overcrowding.