PH among countries with weak medium-term growth outlook

by Ben O. de Vera, Philippine Daily Inquirer, 5 Dec 2020

The damage to be inflicted by the COVID-19 pandemic on the Philippine economy will be like a “long scar” that can take longer to heal, according to UK-based Oxford Economics.

The Philippines, Peru, Colombia and Spain “appear most vulnerable” to “long-COVID scars,” said Oxford Economics head of global strategy and emerging market macro research Gabriel Sterne and economist Tianchen Peng in a Dec. 3 report titled “Calibrating long-COVID vulnerabilities in 162 economies.”

Among emerging markets, the Philippines scored the highest—a seven out of 10 in the think tank’s vulnerability score across 31 metrics, which measured policy offsets, economic and financial imbalances, health-related belief scarring, structure of economy, labor market vulnerability and decline in gross domestic product (GDP) growth in 2020.

Economic managers on Thursday estimated 2020 GDP would shrink by 8.5 to 9.5 percent this year in what would be the Philippines’ steepest post-war recession.

“Within emerging markets, the five economies with a particularly weak medium-term growth outlook are the Philippines, India, Peru, Colombia and Panama,” Oxford Economics said.

The Philippines’ economic team, in contrast, is bullish about a rebound next year with a 6.5 to 7.5 percent growth and an even faster 8 to 10 percent expansion in 2022 when a COVID-19 vaccine would be widely available to stop the pandemic.

In a separate recovery scorecard prepared by Oxford Economics head of India and Southeast Asia economics Priyanke Kishore, only India and Malaysia ranked worse than the Philippines in the region in terms of economic recovery prospects as of December.

The Philippines had a recovery score of negative 0.24, joining Japan, Thailand, Indonesia, Malaysia and India among those considered lagging behind New Zealand, Taiwan, Vietnam, South Korea, Australia, Singapore, China and Hong Kong, which were already making in-roads to recover from the pandemic-induced global recession.

“The Philippines does have a low rank in our scorecard. But we project a substantially weaker growth outcome than the recovery score would indicate. To a large extent, this is due to the damage from several Typhoons, including Goni [“Rolly”] and Vamco [“Ulysses”] in November, which we estimate will shave off 0.2 percentage point from annual growth in the fourth quarter,” Kishore said in her Dec. 3 report titled “Asia-Pacific: A rising tide doesn’t lift all boats equally.”