The Philippines’ economic recovery from the pandemic will lag behind its regional peers, according to the World Bank, as it struggles to move beyond strict closures and stimuli that have been inefficient and inadequate.
The Southeast Asian nation’s “highly decentralized” healthcare system and blockades that were “super draconian” but “porous” made a disastrous combination, said Aaditya Mattoo, the World Bank’s chief economist for the East Asia region and the Pacifico, in an interview. ahead of a regional report released on Friday.
“You incurred financial difficulties without obtaining the benefit of containment,” Mattoo said. That is in contrast to countries like China and Vietnam, which quickly adopted “smarter containment” measures involving testing and tracing.
Read more: The Philippines has become Southeast Asia’s Covid hotspot
Mattoo’s team judged an economy’s recovery path on three factors: managing the virus, trade exposure to the rest of the world, and the government’s ability to provide support. The Philippines underperformed all three, they determined.
- COVID-19 cases they remain high despite severe lockdowns and, at 0.2 doses per 100 people as of March 17, the Philippines is in the bottom half of the 15 regional countries in its vaccination campaign, World Bank data shows.
- Others in the region, including Thailand and Malaysia, could take advantage of growing demand for electronics and a global rebound in trade, while the Philippines remains heavily reliant on tourism and remittances, which have contracted as foreign workers returned to the United States. home. Supply problems were also exacerbated by Typhoon Goni last year.
- The stimulus from the Philippines was not well targeted, and households that did not lose income were just as likely to receive assistance as those that did. Household income fell by nearly 8% of gross domestic income, also at the top end of the region’s economies, World Bank data shows. The Philippines is “relatively conservative in its fiscal position and it is not a country with serious internal debt,” Mattoo said.
The Philippine economy will likely expand 5.5% this year and 6.3% in 2022, staying below its pre-pandemic levels for most of next year, according to the World Bank report on Friday. That’s after its 9.5% contraction last year, the worst in the region outside of the smaller Pacific island countries.
“In the Philippines, growth is expected to recover in the medium term, depending on an improved external environment, a successful vaccination program and the relaxation of movement restrictions,” according to the report.
– With the assistance of Philip Heijmans