NO FREE LUNCH: Anatomy of a recession
Posted on August 11, 2020
The Philippine economy is now officially in recession, the first time in nearly three decades. To be in recession, the economy must have contracted over two consecutive quarters. The earlier reported -0.2 percent GDP year-on-year growth (contraction) posted for the first quarter (Q1) has been revised with fuller data, and turns out to have been more than three times worse, at -0.7 percent. The second quarter (Q2) figure is a much deeper dive of -16.5 percent. Various data feeding into the national income accounts would have been much more difficult to obtain under the community quarantines, so I'd expect the Q2 figures to be even less precise than usual. We will know whether the reported -16.5 percent was an under- or overestimate only in November, when the third quarter data will come out with revised and updated Q2 figures.