Economic recovery from the COVID-19 pandemic will be difficult and fragile, especially for a country like the Philippines, think tanks recently said, pointing to waning consumption support from remittances, deep pandemic scarring, and a rate of infection that remains high as risks that could easily derail any recovery.
In a report, Pantheon Macroeconomics senior Asia economist Miguel Chanco said the “bump” in cash remittances sent home by Filipinos abroad during the middle of this year was “fading.” A steady decline in remittance flows ever since the near 6-percent spike in June is making the spike seem like a fluke, stemming largely from Filipinos overseas transferring more money than usual to take advantage of the peso’s June to July sell-off when the currency crossed the P50:$1 mark.
It is not helping that the number of overseas Filipino workers has been declining since five years ago and has been further reduced by the pandemic as the global economy crashed last year.
In a separate report, Oxford Economics global macro research director Ben May said that “among the larger emerging market economies, we see the Philippines, Indonesia and India faring particularly badly, consistent with the IMF’s view that developing Asia will suffer the deepest scars.”
Further, Socioeconomic Planning Secretary Karl Kendrick Chua said the stringent lockdowns which prolonged high joblessness, slashed government revenues, and delayed the return of in-person classes among Filipino youth; would cost the Philippine economy up to P41.4 trillion in output losses until 2060, citing estimates of the National Economic and Development Authority.
Our country’s economy is still recovering from the onslaught of the pandemic made worse by a weak government response. The focus remains on reopening the economy but as we gear up to attempt a recovery, government will need to be more involved so the country can anticipate and mitigate the expected risks as we start to get back on our feet.
The country’s economic management team is facing a tall order. Hopefully they are capable of leading the country through the perils of post-pandemic economic recovery as it won’t come automatically if by some miracle the pandemic is finally contained.*
