Republic of the Philippines
DEPARTMENT OF FINANCE
Roxas Boulevard Corner Pablo Ocampo, Sr. Street Manila 1004
August 15, 2021 PRESS RELEASE
REF: USEC GIL BELTRAN Chief Economist
Department of Finance Email: [email protected]
DOF Bulletin on the 2021-Q2 Economic Performance
· Year-on-year, the country’s economic output increased by 11.81% in the second quarter of 2021, partially recovering lost output in the same quarter of last year when the economy tanked by nearly 17%. For the first semester, output increased modestly by nearly 3.7%.
· From the expenditure side, household final consumption increased by 7.23%, capital formation by nearly 75.51%, and exports, by nearly 27%. Government consumption, however, decreased by nearly 4.8% due to last year’s Social Amelioration Program. Construction activities ramped up in the second quarter, with general government increasing by nearly 50% and households by as much as 286%. Investment in durable equipment also increased by as much as 89.19%. Of the 11.81% GDP growth, general government construction, household construction, and durable equipment investments contributed 3.23 ppts, 3.17 ppts, and 2.95 ppts, respectively.
· From the supply side, both the industry and services groups posted hefty increases, the former increasing by 20.78%
and the latter by 9.59%. In the industry group, manufacturing and construction activities both posted double-digit growth
rates, at 22.34% and 25.68%, respectively. In the services group, trade rebounded by 5.41% and transportation and hotels,
restaurants, and real estate, the sub-sectors that suffered very heavily, have also partially recovered in the quarter. The
agriculture sector declined by 0.7%, largely on account of livestock production declining by 21.54% as the effects of the
African Swine Fever (ASF) still linger.
Page 2 of 4
DOF View
· The double-digit growth in the second quarter is mainly a result of base effects from a year ago when the whole country was placed under strict quarantine measures. Quarter-on-quarter, however, seasonally-adjusted national income accounts show that GDP declined by 1.31%, largely the result of the mobility restrictions imposed in the NCR Plus Bubble Area. The re-imposition of stricter but localized quarantine measures will have consequences on economic activities in the third quarter. Note, however, that unlike last year, this year’s stricter quarantine measures are much more localized.
· The arrival of more vaccine supplies and the ramping up of the vaccination program will help provide individual protection to the population from the virus. It is important that the risks posed by the epidemic be effectively managed to minimize the collateral damage on the economy and, consequently, people’s incomes.
· The passage of CREATE and the continued infrastructure drive will help the country’s economic competitiveness. To complement these, restrictions on foreign participation in the economy should be eased. Amendments to the Public Service Act, Retail Trade Liberalization Act, and Foreign Investments Act will improve the country’s standing in mobilizing more foreign capital to the country.
Table 1 Economic Growth and Sources of Growth by Expenditure
Growth (%) Contribution to Growth (percentage points)
Expenditure 20-Q2 21-Q1 21-Q2 20-S1 20-S2 21-S1 20-Q2 21-Q1 21-Q2 20-S1 20-S2 21-S1
Household Consumption -15.30 - 4.75 7.23 - 7.72 - 8.14 0.86 -10.57 - 3.55 5.10 -5.52 -5.96 0.63 Government Consumption 21.84 16.07 - 4.87 15.47 5.44 3.45 3.05 2.03 - 1.00 2.00 0.65 0.57 Gross Capital Formation -51.48 -14.80 75.51 -33.13 -35.54 20.21 -13.39 - 3.32 11.48 -8.51 -9.68 3.83 Fixed Capital Formation -35.77 -18.00 37.42 -20.21 -33.83 6.08 - 9.38 - 4.44 7.59 -5.18 -9.37 1.37
Construction -31.24 -25.34 33.39 -18.57 -40.42 2.77 - 5.26 - 3.60 4.66 -2.91 -7.02 0.39
General Government 2.42 25.26 49.65 1.44 -21.42 42.17 0.13 0.68 3.23 0.06 -0.89 1.91
Corporations -25.39 -44.40 - 27.65 -14.32 -47.45 -36.99 - 1.79 - 3.30 - 1.75 -1.05 -3.76 -2.55
Households -79.67 -24.00 286.33 -44.61 -44.82 39.03 - 3.60 - 0.97 3.17 -1.92 -2.36 1.03
Durable Equipment -59.39 -10.28 89.19 -30.21 -29.22 17.99 - 4.01 - 0.80 2.95 -2.20 -2.16 1.01 Export of Goods & Services -33.50 - 8.85 26.99 -19.54 -12.79 6.58 -10.17 - 2.66 6.56 -6.01 -3.55 1.80
Goods -30.57 2.77 35.39 -17.28 - 0.72 17.14 - 4.76 0.43 4.61 -2.70 -0.12 2.45
Services -36.58 -21.14 17.31 -21.89 -30.44 - 5.00 - 5.41 - 3.09 1.96 -3.31 -3.43 -0.65
Page 3 of 4
Less: Imports -37.27 - 7.02 37.79 -22.68 -20.47 11.59 14.96 2.80 -11.46 9.38 8.10 -4.09
Goods -38.48 - 0.50 46.41 -24.28 -16.15 19.59 13.08 0.16 -11.69 8.27 5.03 -5.57
Services -30.58 -31.28 - 4.40 -15.23 -36.47 -21.53 1.88 2.64 0.23 1.12 3.07 1.48
Gross Domestic Product -16.98 - 3.90 11.81 - 9.31 - 9.83 3.69 -16.98 - 3.90 11.81 -9.31 -9.83 3.69 Net Primary Income from Rest of World -24.37 -75.62 - 53.79 -16.56 -44.07 -66.13
Gross National Income -17.62 -10.64 6.64 - 9.99 -12.79 - 2.37
Source of Basic Data: PSA
Table 2 Economic Growth and Sources of Growth by Sector
Growth (%) Contribution to Growth (percentage points)
Industrial Source 20-Q2 21-Q1 21-Q2 20-S1 20-S2 21-S1 20-Q2 21-Q1 21-Q2 20-S1 20-S2 21-S1
Agriculture, Forestry, Fishing 1.55 - 1.30 - 0.06 0.61 - 0.91 - 0.70 0.13 - 0.13 - 0.01 0.06 -0.09 -0.07
Livestock - 8.23 -23.43 -19.48 - 3.40 -10.45 -21.54 - 0.10 - 0.31 - 0.26 -0.04 -0.12 -0.28
Industry -21.78 - 4.39 20.78 -12.60 -13.72 7.41 - 6.59 - 1.32 5.93 -3.84 -4.15 2.18
Mining & Quarrying -21.66 1.00 0.77 -21.49 -14.91 0.87 - 0.25 0.01 0.01 -0.23 -0.10 0.01
Manufacturing -21.16 0.51 22.34 -12.28 - 7.23 10.36 - 3.89 0.10 3.89 -2.37 -1.31 1.93
Utilities - 6.39 1.12 9.82 - 1.20 0.37 5.57 - 0.19 0.03 0.34 -0.04 0.01 0.18
Construction -29.37 -22.63 25.68 -16.91 -32.84 0.85 - 2.27 - 1.47 1.69 -1.20 -2.76 0.06
Services -17.09 - 4.08 9.59 - 9.12 - 9.26 2.61 -10.51 - 2.44 5.89 -5.52 -5.59 1.58
Wholesale and retail trade -14.13 - 3.41 5.41 - 7.12 - 5.11 1.06 - 2.46 - 0.56 0.97 -1.19 -0.98 0.18 Transportation and storage -58.46 -19.59 23.38 -36.20 -24.73 - 4.85 - 2.48 - 0.74 0.50 -1.54 -0.85 -0.14 Accommodation & food service activities -67.14 -22.50 53.40 -40.54 -49.94 - 2.32 - 1.33 - 0.46 0.42 -0.88 -1.11 -0.03 Information and communication 10.68 6.50 14.17 7.81 2.36 10.57 0.30 0.20 0.53 0.22 0.07 0.36 Financial and insurance activities 4.77 4.32 4.24 6.73 4.22 4.28 0.42 0.43 0.48 0.61 0.35 0.45 Real estate and ownership of dwellings -29.90 -11.69 16.70 -16.83 -17.18 0.65 - 1.89 - 0.76 0.89 -1.09 -1.08 0.04 Professional and business services -15.71 - 4.37 11.72 - 9.96 - 9.98 4.15 - 1.03 - 0.24 0.78 -0.61 -0.61 0.25 Public administration 7.11 7.49 3.96 6.43 2.83 5.47 0.34 0.32 0.24 0.29 0.13 0.29
Education -14.47 0.23 10.03 - 7.43 -14.52 5.24 - 0.65 0.01 0.46 -0.32 -0.53 0.23
Human health and social work activities -15.38 13.19 12.11 - 6.67 - 0.82 12.68 - 0.27 0.24 0.22 -0.12 -0.01 0.23
Other services -63.66 -38.73 39.38 -36.93 -45.63 -16.06 - 1.48 - 0.90 0.40 -0.90 -0.96 -0.27
Gross Domestic Product -16.98 - 3.90 11.81 - 9.31 - 9.83 3.69 -16.98 - 3.90 11.81 -9.31 -9.83 3.69 Net primary income from the rest of the world -24.37 -75.62 -53.79 -16.56 -44.07 -66.13
Gross National Income -17.62 -10.64 6.64 - 9.99 -12.79 - 2.37
Source of Basic Data: PSA
Page 4 of 4
Table 3 Quarter-on-Quarter Growth Based on Seasonally-Adjusted Accounts (%)
20-Q1 20-Q2 20-Q3 20-Q4 21-Q1 21-Q2 Agriculture, Forestry, & Fishing - 0.34 0.04 0.14 - 2.34 1.32 0.55 Industry - 7.99 -20.11 11.24 7.41 0.14 1.10 Services - 3.83 -15.06 8.85 2.90 0.86 - 2.78
GDP - 4.80 -15.13 8.55 3.66 0.69 - 1.31
Household Consumption - 2.99 -14.86 3.81 1.96 - 0.35 1.49
GNI - 3.63 -13.31 8.51 1.21 0.17 - 2.40
Source: PSA
