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Item Restricted Predicting recessions in the RP: a reassessment of the Philippines' leading economic indicators(2002-03) Santos, Maria Isabelle Calpo; Tolo, Willa Boots Jallorina; Reside, Renato E. Jr.This paper examines the performance of the Philippine Leading Economic Indicators System (LEIS) in predicting Philippine recessions. Evaluating the predictive powers of leading indicators is crucial in gauging if these indicators indeed define substantial downturns and serve their primary function in giving warning signals to economists. Since the Philippines has no official definition for recessions, the commonly-used definition of two (2) consecutive quarterly declines in Real Gross Domestic Product (RGDP) was used. It was found that the Philippines has been in recession for three times already within the span of 1981-2001. Regression analysis shows that Hotel Occupancy Rates, Money Supply, Exchange Rate and Electrical Energy Consumption predict recessions at a 5% level of significance. Total Imports is a marginally significant predictor at 10% level of significance. Tourist Arrivals, New Business Incorporations and the Stock Price Index did not materialize as significant indicators in predicting recessions. These indicators were simulated under the EViews software using the probit equation.