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Philippine recovery from COVID-19 longest in SEA – Citigroup
Johanna Chua, managing director and head of Asia Pacific economy and market analysis at Citigroup, said it would take the Philippines until 2022 to recover from the pandemic.
STAR/Miguel De Guzman, file

Philippine recovery from COVID-19 longest in SEA – Citigroup

Lawrence Agcaoili (The Philippine Star) - January 20, 2021 - 12:00am

MANILA, Philippines — Philippine economic recovery from the coronavirus pandemic is expected to be slower than its peers in Southeast Asia, according to US-based investment bank Citigroup.

Johanna Chua, managing director and head of Asia Pacific economy and market analysis at Citigroup, said it would take the Philippines until 2022 to recover from the pandemic.

“I think the Philippines is probably going to take the longest to recover. The Philippines may take longer to return to pre-COVID level. We actually don’t see the Philippines coming back until 2022,” Chua said during the virtual 2021 Credit Outlook conference arranged by Fitch Ratings.

Chua said the Philippines and Indonesia are very different. Indonesia bounced back earlier because it did not impose a much harsher lockdown.

“The Philippines actually had a lot of this kind of community quarantine that took a little bit longer, so mobility is much more impaired. The Philippines is a lot more dependent on services sector and service sector employment, so that obviously is a little bit more impacted,“ Chua said.

Chua said recovery would be faster in Malaysia as it is more tied to the global trade cycle in terms of goods, as well as its sizeable fiscal stimulus via cash support to households.

She also said that although Thailand’s economic recovery would be challenging because of conservative monetary and fiscal support measures, it would still be faster than that of the Philippines.

The Philippines slipped into recession with its gross domestic product (GDP) contracting by 10 percent from January to September last year as the economy stalled when Luzon was placed under enhanced community quarantine to slow the spread of the virus.

The slowdown eased to 10.5 percent in the third quarter of last year from a record 16.9 percent in the second quarter as the economy partially reopened when the National Capital Region (NCR) shifted to general community quarantine.

Chua said there was a private sector investment boom in the Philippines before the COVID-19 outbreak.

“So even though the fiscal balance sheets are very strong, the government can come in to provide some support and that could help drive the infrastructure. I worry that the lag, the overhang of private sector capex is going to take a lot longer to unwind going into the post rebound from the recovery from COVID,” Chua said.

Furthermore, Chua said the Philippines is also a laggard in terms of COVID-19 vaccine procurement among ASEAN.

“When it comes to vaccine procurement and we kind of track the supply, I think the Philippines is actually one with the least procurement. In ASEAN, actually Singapore seems to be a little bit ahead and then Thailand and Malaysia. Thailand is a little bit more than Malaysia in terms of procurement.  Philippines is a little bit lagging,” Chua said.

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