The Philippines may suffer long-lasting economic losses owing to prolonged coronavirus pandemic that took a heavier toll on small businesses and low-income families, think-tank Moody’s Analytics said.
Steven Cochrane, Moody’s Analytics chief economist for Asia-Pacific said that heightened social distancing restrictions amid threats posed by the Delta variant is now adversely affecting Asia-Pacific economies, including the Philippines.
But Cochrane particularly took note of the situations in the Philippines and India where “downside risks are considerable” in the second-half of the year and into 2022.
The Moody’s Analytics economist explained that India and the Philippines “seeming outsize gains” this year are mainly on base effects following the very deep recessions in 2020 due to lengthy economic shutdowns.
Likewise, Cochrane noted that “only modest fiscal support” was provided by the governments of India and the Philippines to small and medium enterprises (SMEs) as well as low income households.
Based on Moody’s Analytics estimates, prolonged economic shutdowns and anemic fiscal support in the Philippines and India “could lead to very deep and lasting scarring” in their economies.
SMEs “struggle to reopen businesses, pay back loans,” while and low-income families have grappled to “find employment as the economy finally recovers.”
On Sunday, July 25, the government reimposed longer curfew hours in Metro Manila from 10 pm to 4 am. The capital region was also placed under stricter restrictions after confirmation of local transmission of the Delta variant.
Amid mounting concerns on Delta variant, the government assured that there would be enough supply of COVID-19 vaccines for the country's adult population this year.
Finance Secretary Carlos G. Dominguez III said the ongoing vaccine deliveries are expected to reach 171 million doses before the end of the year, or more than enough to inoculate 70 million or 100 percent of the country’s adult population.
“By the end of this year we will be able to vaccinate the entire adult population of the Philippines. Hopefully everybody will agree to be vaccinated,” Dominguez told President Duterte during a televised meeting last Saturday.
However, Moody’s Analytics was not buying government’s explanation, noting that Indonesia, the Philippines and Thailand are "struggling to acquire a sufficient number of doses.”
“We still expect the timing of the achievement of herd resilience to extend into 2023 for at least these three countries,” Cochrane said.