MANILA, Philippines — The Philippines would have to wait until the second half of next year to see significant growth as risks of new COVID waves and still slow vaccination rollout are expected to hamper the country’s economic rebound.
In a report, London-based Oxford Economics retained its 3.5 percent gross domestic product (GDP) growth forecast for the Philippines this year.
The figure was already reduced five times since the start of the year amid renewed spikes in cases which prompted lockdowns. The Philippines also got the largest downgrade among Asia Pacific countries.
Oxford lead economist Simon Knapp said the disappointing performance of the region’s emerging markets reflects recent COVID developments.
“Stubborn outbreaks and the emergence of the Delta variant have generally kept mobility levels far below normal in emergina markets in Southeast Asia, dampening activity even as firms and consumers get more used to living with COVID-19,” Knapp said.
Metro Manila, where the bulk of economic activities are situated, just came from more than a month of quarantine measures due to a surge in COVID cases.
Still, the economy has yet to be fully opened as the government implements its alert level system for COVID-19 response. The capital is currently under Alert Level 4.
Under that level, certain restrictions for businesses and activities remain in place while select indoor activities are allowed only for fully vaccinated individuals.
Further, Knapp emphasized that the progress on vaccinations would have a significant bearing on the robustness of economies this year and next.
Vaccination has ramped up in the country over the past months but the pace is still not fast enough to reach herd immunity as targeted by year-end. In fact, Oxford expects herd immunity only by June 2022.
“India, Indonesia, Thailand and the Philippines are likely to have achieved a level of vaccination by the middle of 2022 that should greatly reduce the need for restrictions on mobility or activity,” Knapp said.
“This offers hope of a very strong second half in 2022 and a restart of large-scale tourism. But there’s also the risk that growth could be disrupted in the intervening quarters, depending on pandemic developments,” he said.
Latest government data showed that some 40 million doses have been administered in the country.
About 16.3 percent or 17.68 million Filipinos have been fully vaccinated while those who were given at least one dose reached 18.7 million or some 17.3 percent of the population.
While Oxford sees a much weaker rebound for the Philippines this year, it expects GDP to jump 7.5 percent by 2022.
“This year’s laggards are likely to be next year’s outperformers as increased vaccinations reduce the impact of the pandemic and its associated disruption,” Knapp said.
“By the middle of next year China, India, Indonesia, Philippines and Vietnam should all have returned to the strong growth trends seen before the crisis. As a result, in 2022 and beyond, Asia Pacific will resume its normal position as clearly the world’s fastest-growing region,” he said.