Bangko Sentral Notes GDP Decline
The Bangko Sentral ng Pilipinas said that the real gross domestic product (GDP) declined by 4.2 percent year-on-year in Q1 2021 following an 8.3-percent drop in Q4 2020.
It also said that on the production side, the decline in Q4 2020 was attributed to smaller output contractions in the industry, services, and agriculture sectors while on the expenditure side, private consumption remained weak but showed signs of improvement.
Similarly, investments and external demand recorded slower contractions relative to Q1 2021, while government consumption continued to expand, it said.
The BSP also noted that high-frequency indicators pointed to a recovery in domestic demand with property prices in the main business districts of the National Capital Region (NCR) continuing to decline, while residential property prices outside the NCR went up.
New vehicle sales and energy sales also improved. The manufacturing volume of the production index rose in April with expansion observed in a majority of sub-sectors.
Likewise, average capacity utilization rose slightly in April as both volume and value of production orders in the manufacturing sector grew.
Following a 15-month contraction, the composite Purchasing Managers’ Index (PMI) returned to expansion territory in May 2021.
Meanwhile, business sentiment was less optimistic for Q2-Q3 2021 due mainly to the continuing increase in COVID-19 cases and the reimposition of stricter community quarantine protocols, and the elevated inflation environment.