‘Prolonged virus outbreak a major risk to recovery’

MANILA, Philippines — Japanese investment house Nomura said the prolonged coronavirus outbreak in the Philippines is likely to remain a major risk to the country’s recovery from the economic fallout caused by the pandemic.

In a report titled “ASEAN: COVID-19 positivity rates remain high in Indonesia and the Philippines,” Nomura economist Euben Paracuelles said both Manila and Jakarta would continue to struggle to contain the outbreak.

“The prolonged local outbreak remains a major risk to the recovery, especially because economic centers are still hotspots. This will keep household and businesses cautious even if no lockdown is reinstated,’’ he said.

“We believe this not only reflects higher testing capacity, but also higher local transmission rates consistent with the uptrend in positive rates since June,” he said.

Paracuelles said Metro Manila is the main driver of the increase in total cases due to its high population density.

He said the seven-day average COVID-19 positive rates remain in double digits at 11.6 percent in the Philippines and 13.5 percent in Indonesia despite moderating in recent days.

COVID-19 cases in the Philippines soared to over 200,000 as of Wednesday from about 100,000 on Aug. 2.

Nomura expects the Philippine economy to contract by 6.6 percent this year.