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MANILA, Philippines – The Philippine economy was projected to grow at a slower rate in the first quarter of 2021, compared to an increase in production in the fourth quarter of 2020, as a result of the decision to maintain the COVID-19 quarantine current restrictions until elusive mass vaccination is implemented.
In a statement on Tuesday (February 23), the acting secretary of Socioeconomic Planning, Karl Kendrick Chua, said that the state planning agency National Economic Development Authority (Neda), which he heads, “supports the recent decision of the president of do not change to MGCQ “. or modified general community quarantine. MGCQ is the least stringent level of restrictions to prevent the transmission of SARS Cov2, the virus that causes COVID-19 and which had made humans its carriers.
Last week, Chua urged President Rodrigo Duterte to place the entire Philippines under MGCQ to address higher rates of hunger and unemployment in areas under stricter quarantine measures, which included the Metro Manila commercial and financial center, amid a still high number of COVID-19 infections.
Chua told the Inquirer last Sunday (February 21) that a uniform MGCQ across the country would allow up to 95 percent of economic activities to resume.
But the president said on Monday (February 22) that the entire country cannot move into a more relaxed quarantine without a mass vaccination program.
Chua said that “the entire government will work hard, in cooperation with various sectors, to implement the vaccine so that we can further open the economy.”
In a February 22 report, UK-based Oxford Economics projected that the Philippines’ GDP will exceed 1 percent in quarter-on-quarter growth during the first quarter of 2021.
However, this increase in production would be slower than the 5.6 percent quarter-on-quarter growth recorded in the fourth quarter of 2020.
During the third quarter of 2020, GDP increased 8 percent compared to the economic low of the second quarter, when 75 percent of the economy froze under the stricter enhanced community quarantine (ECQ) imposed from mid-March to May 2020.
However, the Philippines would be among the few countries whose first quarter GDP would exceed the previous quarter’s output, as Oxford Economics put it “a lot of economies that expanded in the fourth quarter [of 2020] expected to contract in the first quarter [of 2021]. “
Globally, “the widespread slowdown in the first quarter is largely a reaction to tighter activity restrictions,” as new and more contagious virus variants were detected earlier this year, said Ben May, director of research. Oxford Economics global macro, in a report. .
In another report on February 22, Oxford Economics head of global strategy and emerging markets macro research, Gabriel Sterne, and economist Tianchen Peng, noted “upside” risks to GDP in larger emerging markets such as the Philippines, Brazil, Egypt, India, Indonesia and Mexico. and South Africa.
However, the economic scars caused by COVID-19 may take longer to heal in the Philippines, Colombia, Peru and Spain, they said in their report.
Furthermore, UK-based Capital Economics said on Tuesday (February 23) that while new coronavirus cases appeared to have peaked in the Philippines, Indonesia and Malaysia, “the slow launch of the vaccine means that the restrictions should remain in force for a longer time, supporting the economic recovery ”in these three countries.
Capital Economics senior economist Gareth Leather and Asian economist Alex Holmes noted that mass inoculation has not yet started in the Philippines.
Across Asia, “production delays and administrative problems are likely to delay launch” as “many countries are unlikely to get a steady supply of vaccines until the second half of the year.”
“Vaccine vacillation could also delay launch,” Capital Economics said in a report.
He cited a YouGov poll that showed that less than half the population of Hong Kong, Taiwan and the Philippines “would definitely take a vaccine if one was offered.”
“Our working assumption is that for most places it will take around 12 months for the most vulnerable to get vaccinated,” Capital Economics said in its report.
“Overall, the slow launch of the vaccine reinforces our view that most economies will remain depressed for some time, and that policy should remain supportive,” he said.
“We expect the central banks of Indonesia, the Philippines, Malaysia and Vietnam to lower interest rates further in the coming months, and that official rates in the rest of the region will remain very low for a considerable future. Fiscal policy will also remain lax; there are few signs that policymakers want to adjust fiscal policy prematurely, “said Capital Economics.
TSB
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