Moody's Analytics, a subsidiary of Moody's Corporation, said Monday the Philippines had become the regional laggard as the country continued to contain the COVID-19 pandemic and roll out its vaccination program.
The country's gross domestic product is forecast to grow just 5.3 percent this year, down from an earlier forecast of 6.5 to 7 percent made in February.
Economic output isn’t forecast to return to pre-pandemic levels, defined as the December quarter of 2019, until the final quarter of 2022, Moody’s Analytics said.
“In contrast, China, Taiwan, South Korea, and Vietnam have returned to previous output levels, while Indonesia and Thailand are on track to return this year,” the analytics firm said in a paper published Monday.
“This makes the Philippines the clear laggard in Asia,” the firm added.
Moody’s Analytics said the country’s decentralized healthcare system made responding to the COVID-19 outbreak inconsistent across local government units.
“As a result, there were not consistent policies and rigorousness around contact tracing, funding, and quarantine measures for those infected and their close contacts.”
The financial services firm also pointed to the slow pace of the country’s vaccination rollout.
ABS-CBN’s vaccine tracker shows that as of May 20, only 949,939 have been fully vaccinated against the novel coronavirus, representing just 1.64 percent of the government’s target of vaccinating 58 million Filipinos before the end of the year.
“This is problematic because it means the Philippines remains vulnerable to continued local infection spikes, inhibiting the economic recovery as it is assumed the government will reintroduce strict lockdowns to contain further infections.”
Moody’s Analytics said the Philippines has had difficulty containing new local COVID-19 infections despite imposing one of the strictest lockdowns in the world.
“The Philippines has one of the most stringent social restrictions, according to the government stringency index. Late in 2020, the government-mandated lockdown closed approximately 75 percent of the economy.”
The financial services firm said measures that included closing mass transportation and banning minors and the elderly from being in public places, make it among the world’s strictest lockdowns.
Earlier, Moody’s Analytics said, “risks to recovery have not been mitigated.”
“The volatile course of the pandemic continues, with the resurgence of COVID-19 (coronavirus disease 2019) cases in India and stronger waves in Japan and the Philippines, among others.
High transmission risks from newer variants and slow vaccination rollouts, weakened by supply shortages or logistical snags, remain pertinent factors until countries aggressively move towards herd immunity,” it said.
Economic managers said 2021 was a recovery year for the Philippines, with the gross domestic program (GDP) target set between 6.5-7.5 percent.
They lean this growth target on optimism on the government’s COVID-19 vaccination program as well as on higher spending for infrastructure spending.
The Philippine Statistics Authority is scheduled to release the first quarter 2021 GDP report shortly.
Earlier this month, Fitch Solutions also lowered its economic growth forecasts for the Philippines for this year and next year noting that the country is having difficulty checking the COVID-19 outbreak, and is struggling to vaccinate its citizens.
Fitch Solutions Country Risk and Industry Research forecast the country’s gross domestic product to grow 5.3 percent this year, down from an earlier forecast of 5.8 percent.