Philippines cautioned against loosening social restrictions

MANILA, Philippines — Moody’s Analytics has warned the Philippines about loosening its social restrictions amid the recent trend in the resurgence of COVID-19 infections as well as the spread of the Delta variant across  Asia-Pacific.

In a report, Moody’s Analytics senior Asia-Pacific economist Katrina Ell and economist Stefan Angrick said the contagious Delta strain is sweeping through Asia and hurting the region’s economic recovery.

The research arm of the Moody’s Group said numerous economies in the region are dealing with fresh outbreaks and restrictions, with Indonesia as the most problematic and likely to be the hardest hit.

On the other hand, Ell and Angrick said the daily number of new infections in the Philippines has stabilized with a decline in active cases.

The drop in active COVID cases may prompt the government to ease restrictions in the National Capital Region and nearby provinces (NCR Plus), Moody’s Analytics said.

“However, given the recent trend of virus resurgence and spread of the Delta variant across Asia-Pacific, the Philippine government needs to be cautious in loosening its social restrictions,” it  said.

In an interview with ABS-CBN news channel ANC, Bangko Sentral ng Pilipinas Governor Benjamin Diokno said he is optimistic due to the pace of vaccination as well as the willingness of Filipinos to be vaccinated, unlike in the United States.

“At least in the Philippines, people are willing to be vaccinated. There are many reasons why we should be optimistic. The vaccines are coming and we have multiple sources of vaccines, unlike in other countries where they have only one or two sources of vaccines,” Diokno said.

The BSP chief said the solution to the economic problem is the further reopening of the economy to bring about higher consumer and business confidence.

“With the willingness of Filipinos to be vaccinated and the coming in of multiple sources of vaccines, I think we will be doing fine,” Diokno said.

Despite the hawkish stance of the US Federal Reserve, Diokno said the BSP is seen keeping an accommodative monetary policy stance until there is clear evidence that the country is  recovering from the pandemic-induced recession.

Diokno cited the country’s hefty gross international reserves level, robust earnings of the business process outsourcing sector, rising remittances of overseas Filipino workers, as well as the steady flow of foreign direct investments.

“So I’m not worried about the Fed’s interest rates going up. That will cause a lot of problems admittedly for other emerging economies, but not for the Philippines,” Diokno said.