‘Recovery slowest in Philippines’

MANILA, Philippines — Economic recovery in the Philippines will likely be among the slowest in Asia because of prolonged lockdowns and the continued rise in the number of cases of the coronavirus disease 2019, according to London-based Capital Economics.

In a recent research brief, Capital Economics said high-frequency data such as mobility data from Google and Apple and daily figures on tourism arrivals and electricity usage suggest that recovery is much faster in China, Taiwan and Vietnam but will be slowest in the Philippines, Indonesia and India.

The macroeconomy research firm said hard activity data such as retail sales, industrial production, and ultimately gross domestic product provide the most complete picture of output and activity but come with a long delay.

“In these fast-moving circumstances, they aren’t a very useful guide for policymakers and markets,” said Capital Economics.

Through the use of high-frequency data, Capital Economics said economic activity in most countries appeared to have already bottomed out in April and is now set for recovery.

However, the pace of recovery is uneven across the region as countries where mobility restrictions are still in place and little improvement in the rise in the number of confirmed COVID-19 cases appear to be recovering slowly.

“The high-frequency data that we track suggest that while all countries in the region are now rebounding, the pace of recovery varies significantly. The recovery is most advanced in China, Taiwan and Vietnam. The Philippines, Indonesia and India are doing the worst,” said Capital Economics.

But even with faster recovery in some countries, overall recovery in Emerging Asia economies will likely be slow as unemployment levels remain high and balance sheets become “impaired.”

In places where the virus is not yet fully contained, social distancing measures will need to remain in place for much longer, further dragging on the recovery.

Weaker demand from overseas will also become a drag on the growth momentum.

“While global demand may now have bottomed out, it remains very weak,” said Capital Economics.