The country's gross domestic product shrank 11.5 percent in the third quarter from a year ago, an improvement from the revised 16.9-percent decline in the second quarter, as the economy continued to bear the impact of the coronavirus pandemic and the community lockdown.
The government economic managers said in a joint statement the smaller GDP contraction in the third quarter indicated that the economy was on the mend. "The path is clearer to a strong bounce-back in 2021," they said.
The Philippine Statistics Authority said among the industries that weighed down on the economic performance in the July-September quarter were construction which contracted 39.8 percent; real estate and ownership of dwellings, -22.5 percent; and manufacturing, -9.7 percent.
The top three industries that posted positive growth were financial and insurance activities, with 6.2 percent; public administration and defense, compulsory social activities, 4.5 percent; and agriculture, forestry, and fishing, 1.2 percent.
"On the expenditure side, the government final consumption expenditure posted positive growth of 5.8 percent while household final consumption expenditure declined by -9.3 percent, along with the gross capital formation at -41.6 percent; exports, -14.7 percent; and imports, -21.7 percent," the PSA said.
Net primary income from the rest of the world and the gross national income declined by 28.2 percent and 13.0 percent, respectively, according to the PSA.
GDP also contracted 9.7 percent in the first three quarters, worse than the government's expectation of a 6-percent decline for the whole year. It was also the deepest slump of the economy in more than three decades.
"The double-digit contraction in the third quarter is not surprising given the return to more stringent quarantine measures in NCR and neighboring provinces, and Cebu City, which together account for around 60 percent of the Philippine economy," the economic managers said.
Public transportation remained restricted in the third quarter, preventing many Filipinos from leaving their homes and reporting for work even if their industries were allowed to operate.
With 58.2 percent of workers in Metro Manila allowed to resume work in September, public transportation at that time could only accommodate 35.5 percent because of social distancing rules and lower operator turnout. This meant that some 22.7 percent of NCR workers could not go to work, according to the statement.
"Nonetheless, the economy has begun to recover. On a quarter-on-quarter basis, the economy grew by 8 percent in the third quarter, reflecting the return of economic activities as the quarantine was eased," the economic managers said.
They pointed to recent developments showing that the Philippines’ economic fundamentals remained strong and managing risks going forward would allow the government to open up even more of the economy safely to accelerate the recovery.
"Our experience with COVID-19 over the past several months tells us two things. First, the economy is strong enough to recover, if we enable it to do so. Second, our best recourse to help the economy is to manage the risks," they said.
"Managing risks, instead of avoiding them, will allow us to safely open more of the economy and help Filipinos recover their sources of income. This will also put the Philippines back on its solid growth and development trajectory," the economic managers said.
Starting October, new guidelines by the Department of Trade and Industry allow more sectors to expand capacity to between 75 and 100 percent.
The Department of Transportation also issued guidelines to increase public transport capacity using a combination of faster turnaround, service contracting and adequate social distancing, such as the “one seat apart” rule while following the “seven commandments.”
"At the same time, as the economy opens up, the government continues to ensure hospitals are equipped and preparation for vaccine procurement is underway," the Cabinet officials said.
"These polices to manage risk will help limit total COVID-19 cases, ensure we are able to care for the critically and severely ill and allow everyone else to safely return to work and address their non-COVID-19 health needs. Successful implementation of this strategy will also help improve consumer confidence to support near-term growth," the economic team said.
"Our experience in 2020, thus far, shows our resilience as a nation. We are aware of and very thankful for the many sacrifices the Filipino people have to make—from mothers who juggle work while helping their children study remotely, to healthcare workers in testing centers and in hospitals who risk their lives to detect the virus and care for the very sick, some of them our family members and close friends," they said.
"The challenges are immense, but we are determined to build back a better economy our people deserve," the Cabinet officials said.
