Philippine recovery loses momentum – think tank

MANILA, Philippines — The Philippines has lost momentum in recovering from the pandemic due to the reimposition of movement restrictions and must now accelerate economic activities to catch up with regional counterparts, a think tank said yesterday.

In a research briefing, UK-based Oxford Economics said the Philippines faces downside risks in growth expectations for the first quarter.

The country’s performance must exceed expectations for it to keep up with its Southeast Asian counterparts, Oxford Economics said, noting that this may be challenging to do with lockdowns enforced in selected areas, including Metro Manila.

“Beyond Q1, we think risks are still tilted to the downside for the Philippines and Thailand. Daily COVID infections remain high and another lockdown may be required in the Philippines,” Oxford said.

The Philippines still has the second highest COVID-19 cases in Southeast Asia, with roughly one million infections as of Sunday. With a recent spike in transmissions, the government tightened quarantine restrictions in Metro Manila and its surrounding provinces until April 30.

Oxford Economics forecasts gross domestic product (GDP) of the ASEAN-6 – made up of Indonesia, Malaysia, the Philippines, Singapore, Thailand and Vietnam – to slip by 1.5 percent in the first quarter.

Cautious outlooks are retained not only on the Philippines but also on Indonesia, Malaysia and Thailand, as these economies are going through cycles of lockdowns to contain their respective local outbreaks.

On the other hand, Singapore and Vietnam are expected to stay ahead of the pack due to their capacity to manage the spread of the virus and keep their business sectors open.

For this year, Oxford Economics projects the Philippine economy to grow by 6.2 percent. It was reduced from the original eight percent forecast as the country may find it challenging to recover with movement restrictions put in place.

Last year, GDP declined by a record 9.6 percent due to regulations that slowed trade, travel and commercial activities, especially in Metro Manila. The government, for its part, targets to expand the economy between 6.5 and 7.5 percent in 2021.

President Duterte is scheduled to announce this week whether he will keep or adjust quarantine restrictions in May, which will determine which industries can operate for the month.