PSA cuts 2023 growth estimate to 5.5%; Q4 to 5.5%

THE faster increase in the prices in the overall economy, not just those experienced by households, led to the latest downward revision of the country’s economic growth in 2023.

The Philippine Statistics Authority (PSA) said fourth quarter growth in 2023 was slower at 5.5 percent from the initial estimate of 5.6.

As a result, the country’s full-year 2023 GDP growth was also revised downward to 5.5 percent, also lower than the initial estimate of 5.6 percent.

On the sidelines of a recent briefing, National Statistician Claire Dennis S. Mapa told Businessmirror that the “reason there [is that the] price, [the] implicit price index, is like a proxy for prices in the overall economy. This inflation is [consumer-led], consumed by households. The prices in the overall economy [which is proxied by the implicit price index], that’s the one with a big effect.”

Mapa said the initial estimate for prices in the overall economy was at 4.5 percent. But additional data that were not included in this computation, and subsequently increased the estimate to 4.6 percent, leading to a slower GDP growth.

This was especially observed in the estimate of constant GDP data. Mapa said in current terms, which is not adjusted for inflation, the country’s GDP value increased. In constant GDP terms, which is compared the 2018 base year to adjust for inflation, the data showed a lower figure.

Based on PSA data, this estimate is now at P7.05 trillion in the fourth quarter and P24.319 trillion in the full year of 2023.

Initially, the PSA estimated the country’s GDP in current terms at a lower P7.051 trillion in the fourth quarter of 2023 but in the whole year of last year, GDP in current terms was higher at P24.319 trillion.

Data showed that in constant terms, in the last quarter of 2023 it was at P5.885 trillion while full year was at P21.052 trillion.

Initially, the estimate for GDP in constant terms was at P5.886 trillion in the fourth quarter and P21.054 trillion in the full year of 2023.

Nonetheless, last year still marked milestones for the economy. It was the first year that the country’s constant GDP value breached the P20-trillion mark, the first time since the earliest full year GDP growth of P447.43 million estimate for 1946.

Based on the data of PSA, it is also the first time for the country to record a constant GDP value of above P5 trillion in the second and third quarters in any year since quarterly GDP data was estimated in 1981.