The Philippines is likely to be the last country in Asia to regain its pre-pandemic economic growth level, which according to Moody’s Analytics could be seen by fourth quarter of 2022.
Moody’s slashed its forecast for Philippine gross domestic product to 6.4 percent in 2022 from 8.8 percent previously as it expects the number of COVID-19 infections to remain high. This is below the government’s 7-9 percent GDP growth target range.
“The revision is due to the still elevated number of deaths due to coronavirus diseases 2019 that may still add stress to the public health system and thus require at least limited neighborhood/community quarantines,” Moody’s Analytics Chief Asia-Pacific Economist Steven Cochrane said.
“The Philippines could be the last country in Asia to achieve this benchmark,” Cochrane said, referring to the pre-pandemic GDP level which could be regained by the country during the fourth quarter of 2022.
He also noted the government has not given any additional fiscal policy support since November 2020. The proposed Bayanihan to Arise as One Act (Bayanihan III) which allots up to P400 billion for stimulus measures to revive the economy is still pending at the Senate. It was approved by the House of Representatives in June, but President Duterte’s economic managers remain cool to the proposal.
Security Bank Corp. Chief Economist Robert Dan J. Roces said with business and consumer confidence still in the doldrums, fiscal support can help boost recovery.
Additionally, Mr. Cochrane said the government needs to put in place an integrated approach to handle the pandemic, which involves prioritizing vaccination, boosting hospital capacity, and improving testing and contact tracing.
The Delta wave is already subsiding in most of Southeast Asia, bringing a reprieve for the last quarter of the year, Moody’s Analytics said. However, this reprieve will be available only to countries whose governments have done their work needed to mount a credible pandemic response.
The Philippines can still beat the gloomy forecasts for its recovery if our government can somehow find the determination and competence to do better than it has over the past 18 months.*