PSA lowers economy’s growth to 5.5% in 2023

The Philippine economy expanded by 5.5% in 2023, a tad slower than initially reported, the Philippine Statistics Authority (PSA) said on Thursday.

PSA data showed gross domestic product (GDP) — the value of all finished goods and services produced in the country at a given period — grew by 5.5% last year, slightly lower than the 5.6% initially reported on Jan. 31.

Philippine GDP growth in 2023 was slower than the 7.6% expansion in 2022. It was the weakest growth since 2020 when GDP contracted by 9.5% amid the strict lockdown.

Economic growth for the fourth quarter was also downwardly revised to 5.5%, a tad slower than the 5.6% preliminary figure. This was still lower than the 6% GDP growth in the third quarter last year and the 7.1% expansion in the fourth quarter of 2022.

On the other hand, the PSA kept the gross national income — the sum of the nation’s GDP and net primary income from the rest of the world — unchanged at 10.5% and 9.9% in 2023 and 2022, respectively.

In 2023, there were no changes to the growth in agriculture (1.2%) and the industry sector (3.6%), but the services sector’s expansion was lowered to 7.1% from 7.2% it initially reported.

For the fourth quarter, the agriculture sector grew by 1.3%, slightly slower than the 1.4% preliminary figure.

The industry sector’s growth was also revised downward to 3.1% from 3.2% initially reported.

The growth of the services sector, on the other hand, was unchanged at 7.4%.

Likewise, the PSA also downwardly revised the growth rates of the following industry subsectors: manufacturing (0.5% from 0.6%); electricity, steam, water and waste management (5.5% from 6.4%); and construction (8.4% from 8.5%).

Meanwhile, the following services subsectors grew faster than previously reported: real estate and ownership of dwellings (5.5% from 3.9%), information and communication (5% from 3.6%), financial and insurance activities (12% from 11.8%), education (8.1% from 7.9%) and professional and business services (6.1% from 6%).

On the expenditure side, government spending grew by 0.6% in 2023, slightly quicker than the 0.4% preliminary figure. In the fourth quarter, state spending contracted by 1%, less than the 1.8% decline that was initially reported.

Household consumption growth was unchanged at 5.6% for 2023, and 5.3% for the fourth quarter.

For trade in goods and services, the PSA revised the imports growth in the fourth quarter to 2% from 2.9% previously. Exports shrank by 2.5% in the October-to-December period from the 2.6% decline previously reported.

On an annual basis, exports growth was upgraded to 1.4% from 1.3% previously, while import growth was revised downwards to 1% from 1.6% previously.

Gross capital formation, the investment component of the economy was raised to 5.9% in 2023 from 5.4% previously.

For the fourth quarter, gross capital formation growth was upwardly revised to 11.6% from the preliminary estimate of 11.2%.

National account revisions are based on approved revision policy, which is consistent with international standard practices, the PSA said. – Abigail Marie P. Yraola, Deputy Research Head