The recovery of the Philippines from the pandemic hinges on the pace of coronavirus vaccinations as efforts to reopen the economy have been undermined by the surge in new infections, the Asian Development Bank (ADB) said.
Kelly Bird, ADB country director for the Philippines said on Wednesday, April 21, that the country only achieved a fragile recovery in the first semester of the year due to the re-imposition of strict community lockdowns following a sharp surge in COVID-19 cases.
“We do expect though that the economy for the first half of this year will remain fragile in terms of the recovery,” Bird said during a virtue roundtable. “This is because of uncertainty about the pandemic, how it unfolds, globally, and domestically.”
Bird said that gross domestic product (GDP) still looks timid in the first-half as high unemployment rate continues to retrain household spending, the biggest component of the local economy.
The ADB representative also said private investment remains sluggish this year due to weak domestic demand.
“A lot of parts of the economy are still not fully opened,” Bird said. “Private investment will remain stagnant for most of this year, and that's because there's a lot of excess capacity.”
But Bird said ADB expects exports will improve this year, while public spending, particularly on infrastructure projects, will provide the largest boost to economic rebound.
“We know that a lot of large, complex projects will come out on stream this year. And that’s a positive sign and will help support recovery this year and next year. It also has a lot of linkages with the rest of the economy,” Bird said.
“In a way the Philippines is much better place than a lot of other countries because they’ve gotten place ‘Build, Build, Build’ infrastructure program. In times like this, infrastructure investments are critically important for recovery, because it's a major employer,” he added.
While green shoots of recovery continue to emerge for the Philippines despite headwinds, Bird the speed of its economic recouping will still depend on the pace of vaccination operation against COVID-19.
“Key to opening up an economy is the rollout of the vaccination program,” the ADB economist said.
Despite criticisms against the government’s slow inoculation program, Bird said the country’s system for the procurement and distribution of vaccines is “up and running, it’s working very well.”
“When more vaccines come into the country, I think it bodes very well for the Philippines. Clearly, rolling out and making significant progress on vaccination will help fast reopening of the economy in a safe way,” Bird said.
The Philippines began the procurement for 148 million doses of COVID-19 vaccines that can inoculate 70 million Filipinos, or two-thirds of its around 110 million population.