Philippines Economic Outlook Improves as COVID-19 Cases Dip.

[ASEAN NOW News]

MANILA, Philippines — The declining number of COVID-19 cases in the Philippines augurs well for economic recovery and the return of jobs lost amid last year’s pandemic-induced steep recession.

 

 

However according to a report in the Philippine Daily Inquirer, three think tanks on July 5th cautioned the government against letting down its guard against the virus, especially as the more contagious Delta variant forced renewed lockdowns, which hurt neighboring economies.

 

Also the world has to be concerned of reports of the latest variant Lambda, a new Covid-19 strain that is much more dangerous than the Delta variant has been detected in more than 30 countries in the past four weeks, says the World Health Authority.

 

“The outlook for the Philippines has improved. The country has seen a decline in daily new infections after breaking records in the region earlier this year. New cases fell from a peak of more than 11,000 daily to half that level now,” Moody’s Analytics senior Asia-Pacific economist Katrina Ell and associate economist Dave Chia said in a report Monday.

 

To recall, a surge in infections last March led to the revert to the most stringent quarantine levels in Metro Manila and four surrounding provinces accounting for half of the economy up to mid-May.

 

“The Philippines’ retail activities are expected to gradually pick up in line with eased restrictions from mid-July,” Moody’s Analytics said.

 

But Moody’s Analytics said the Philippines “needs to step up its vaccination efforts, as the sluggish campaign leaves it vulnerable to fresh resurgences” like those currently happening in Indonesia and Malaysia.

 

Fully Vaccinated

 

As of Sunday night, 11.71 million doses had been administered in the Philippines, but only 2.87 million Filipinos were fully vaccinated with two jabs.

 

However, Metro Manila has just announced that they are having to limit vaccines to second does to the public only as vaccine stocks dwindle.

 

The government targets to inoculate 70 million adults by year end to achieve herd immunity and further reopen the economy.

 

Job Market Has Improved Slightly

 

Pantheon Macroeconomics senior Asia economist Miguel Chanco said in a separate report that the decline in unemployment rate to 7.7 percent in May from 8.7 percent on April during the reimposed lockdowns in National Capital Region (NCR) Plus “indicated that the job market generally has improved since the start of the year.”

But Chanco said “Filipino jobs remain scarce,” as “the rising number of people returning to the workforce has flattened the unemployment rate.”

 

“The number of jobless workers effectively hasn’t moved, fluctuating around four million since the fourth quarter" [of 2020].

 

"By contrast, the size of the labor force has jumped by 11 percent since the start of the year, with the participation rate more than surpassing the pre-COVID-19 level and now hovering at its highest rate since 2015,” Chanco said.

 

Also, on Monday, Japan Center for Economic Research (JCER) said the Philippines and Thailand have recently “fared better” than Malaysia in terms of combating new infections.

 

Most affected

 

“The Philippines seemed to be the most affected country at the beginning of April, with the daily new confirmed cases reaching a peak of about 100 per million—more than double India’s per capita figures at the same time.

But with lockdown proving successful in containing the virus, the number declined gradually to 60 per million people,” JCER said.

 

Indonesia has taken over the top spot on Covid Cases in SE Asia, with Philippines now in second place followed by Malaysia and Thailand. However, the number of cases is still expected to rise in those countries.

 

Despite these recent gains in controlling COVID-19’s spread, JCER’s consensus survey conducted last month among economists covering Asean-5, China and India showed a less optimistic average 2021 growth forecast for the Philippines, which declined to 4.3 percent from 5.2 percent previously and remained below the government’s downscaled target range of 6 to 7 percent.

 

The economists projected second-quarter gross domestic product (GDP) to grow 7.4 percent year-on-year, down from their previous consensus of 8.4 percent, and lower than expectations of double-digit expansion coming from last year’s very low base when 75 percent of the economy stopped at the onset of the pandemic.

 

“The economy is seen bouncing back this year on gradually recovering domestic activity, also supported by a firming construction sector. Moreover, continued vaccination efforts globally should boost foreign demand and rekindle the external sector. That said, the significantly low domestic vaccination rate clouds the outlook,” JCER quoted BDO Unibank’s chief market strategist Jonathan Ravelas as saying.