UPDATE 2-Philippine economy shrinks at slower pace in Q4, posts record contraction in 2020

* Q4 GDP shrinks 8.3% yr/yr, grows 5.6% qtr/qtr
* Full-year GDP slumps 9.5%, worst on record
* Government says 2021 prospects "encouraging"
* Philippine economy snapshot: http://tmsnrt.rs/2nZqDWx

(Updates with economist comments, details)
By Neil Jerome Morales and Enrico Dela Cruz
MANILA, Jan 28 (Reuters) - The Philippine economy shrank at
a slower pace in the fourth quarter of last year, helped by
higher government spending, but saw a record full-year
contraction in 2020 as it grappled with the fallout of the
COVID-19 pandemic.
Gross domestic product (GDP) shrank 8.3% in the December
quarter from a year earlier PHGDP=ECI , the statistics agency
said. Economists in a Reuters poll had forecast a 8.5%
contraction after a fall of 11.4% in the third quarter.
A 4.4% year-on-year increase in government spending helped
limit the slump.
For the whole year, GDP shrank 9.5%, the biggest contraction
on record and compared with a government forecast for a
8.5%-9.5% slump in 2020.
The Philippines, which has the highest number of coronavirus
infections and COVID-19 deaths in Southeast Asia after
Indonesia, suffered its first recession in nearly 30 years in
the second quarter of 2020.
"Private consumption remained weak," said Economic Planning
Secretary Karl Chua at a briefing. "Restrictions on the demand
side notably the mobility of children and families prevented
private consumption from making a stronger comeback."
President Rodrigo Duterte has eased quarantine curbs from
the strictest level imposed in March last year, but partial
restrictions remain in the capital region as local cases reached
over half a million and fatalities exceeded 10,000. The restrictions reduced household spending by 2.2 billion
pesos ($45.72 million) a day, the government said.
The economy grew a seasonally adjusted 5.6%
quarter-on-quarter, slowing from 8% growth in September quarter.
Chua said the prospects for 2021 were "encouraging",
reiterating a government forecast for 6.5%-7.5% growth this
year.
A recovery hinges on the government's plan to vaccinate as
many as 70 million Filipinos, or two-thirds of the population,
this year though supply could delay the timeline.
The Bangko Sentral ng Pilipinas (BSP), which delivered 200
basis points of interest rate cuts last year to try to soften
the blow from the pandemic, believes the current accommodative
monetary stance is sufficient to revive growth. "(The BSP) is likely out of ammunition with the policy rate
at 2.0% while inflation trends closer to the top-end of their
2-4% inflation target," said ING senior economist Nicholas Mapa.
The 2021 budget of 4.5 trillion pesos, though 10% higher
than the 2020 budget, "will not likely be enough to move the
needle", he added.
($1 = 48.1200 Philippine pesos)