The latest outlook of London-based think tank Capital Economics sees the Philippines suffering the most from the Covid-19 pandemic as its continued failure to control infections is making a huge dent in the economy.
The country’s road to economic recovery is slipping further behind compared with the rest of the emerging markets in Asia.
“Lasting damage from the pandemic is likely to be greatest in the Philippines. Failure to suppress infections has required restrictions to remain in place for longer than elsewhere in the region,” Capital Economics said.
Covid-19 cases in the country are set to breach the one-million mark, and despite the strict quarantine measures that have been in place yet again for almost a month now, the average daily tally of new cases remains high.
The think tank has lowered its 2021 gross domestic product growth forecast for the Philippines twice already. The new figure now expects a 7.5 percent growth from the 9.5 percent projection last month. The original forecast was set at an optimistic 11 percent.
While this falls within government targets, it is still smaller than the pre-crisis trend and the largest gap in the region. Inflation for the year is likely to settle at four percent, higher than the 2020 level of 2.6 percent and the earlier projection of 3.8 percent.
“The latest wave of infections will increase the lasting damage from the pandemic, including business insolvencies, weaker household balance sheets and high unemployment. Lackluster fiscal support will make these economic scars worse,” Capital Economics added.
While a successful vaccination rollout would be the country’s game changer, it said progress has been disappointing as only 1 percent of the population has been inoculated almost two months since the start of the program. This raises doubts on the government’s ability to meet its target of inoculating 60 percent of the population this year.
With so many failures to contend with, the Philippines should already be preparing for a more difficult recovery period. Unless the people responsible for leading the country out of the rut stop deluding themselves that everything is still alright, the Filipino people will have to brace themselves for even more suffering.*