Duterte's 'new' pandemic strategy gets nod from Moody's unit

MANILA, Philippines — The Duterte administration’s “new” pandemic strategy of ramping up inoculations and relaxing mobility restrictions for those who are vaccinated could help the economy heal faster, although any results from such measures would likely be felt next year.

“This new integrated approach creates some upside potential to the pace of recovery but mostly for 2022, since most of this policy shift will not begin until this year’s final quarter,” Steven Cochrane, chief Asia Pacific economist at Moody’s Analytics, said in a commentary on Thursday.

“If executed well, this could finally help an economy that has been very sluggish under the weight of severe and lengthy lockdowns,” Cochrane added.

In particular, Moody’s Analytics approved of the government’s move to acquire more vaccines to cover all segments of the population by October which, they said, could slow down contagion and “reduce the severity of infections, at least among those vaccinated”. So far, the Department of Finance said the government has secured a total of 194.89 million doses of COVID-19 vaccines that are enough to inoculate more than 100% of the country's adult population.

At the same time, the government’s plan to give vaccinated people “preferred access” on public transit and business establishments like shopping malls and restaurants should help “bolster” economic growth. But the Moody’s unit warned that such a strategy runs the risk of marginalizing those who have not yet received jabs due to supply gaps in some areas.

Moody’s Analytics also liked officials’ plan to impose “granular lockdowns” on specific areas experiencing a flare-up in cases instead of resorting to far-reaching and lengthy restrictions, which has been the government’s go-to solution in the past 18 months that, the Moody's unit said, yielded “little effect".

“There are few details on how this (granular lockdowns) will be designed and implemented, but the proposal offers the potential of allowing greater access to shopping and other economic activities and boosting the pace of economic recovery,” Cochrane said.

The recalibration of the state’s pandemic response comes at a time the Philippines is grappling with a renewed surge in infections fueled by the highly infectious Delta variant. The spike in cases triggered harsh lockdowns in Metro Manila and some provinces last month, dashing any hopes for a meaningful recovery this year.

No less than President Rodrigo Duterte’s economic team expects gross domestic product (GDP) to grow 4-5% this year, abandoning their previous projection of 6-7%. Last week, Socioeconomic Planning Secretary Karl Kendrick Chua said the economy is forecast to return to pre-pandemic levels “sometime at end of 2022, if not early 2023,” when a new administration would have taken over.

Despite approving of the government’s new pandemic game plan, Moody’s Analytics said it is keeping its 2021 growth forecast for the Philippines at 4%, adding they will be “watching carefully” to see how policymakers would execute the revised plans.