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Monitoring the Philippine Economy Third Quarter Report for 2021

Growth remained positive yet slower than the previous quarter, posting a 7.1 percent increase in third quarter 2021 after a historic economic expansion of 12.0 percent in the second quarter. The Philippines records second growth increase after successive contractions. Third quarter GDP growth remained positive at 7.1 percent but slower than last quarter’s highest recorded expansion since 1988 (12.0 percent). It remained strong, however, as it emulated pre-pandemic growth despite the reimposition of an Enhanced Community Quarantine (ECQ) and the rise of the Delta variant, the two factors responsible for the slower growth. While all components of aggregate demand showed large improvements relative to their levels in third quarter 2020, a large slowdown in domestic investment and a slight decrease in private consumption in third quarter 2021 offset the increase in government expenditure compared to the previous quarter. Meanwhile, growth was positive yet not as high as in the previous quarter for the Services and Industry sectors, and with a downtrend in the Agriculture sector. Nevertheless, the third quarter promises consistent positive growth towards pandemic recovery, indicating larger expansions in subsequent quarters. However, the medical crisis and increasing unemployment rates remain important considerations for risk management. Hence, the proper management of economic (both fiscal and monetary) policy together with health policy to ensure increasing vaccination rates and preventing more waves of COVID-19 are key for the Philippine economy’s growth recovery and resilience.


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