The World Bank trimmed its growth forecast for the Philippines this year and expects the country’s economic activity to return to pre-pandemic level by 2023 yet because the government is likely to miss the goal of vaccinating most of its population by the end of 2021.
Based on the World Bank East Asia and Pacific Economic Update released on Tuesday, Sept. 28, the multilateral financial institution trimmed its 2021 gross domestic product (GDP) forecast for the Philippines to 4.3 percent from 5.5 percent penciled in April.
The Washington-based lender also expects slower than initially estimated economic output for next year, lowering the GDP projection from 6.3 percent to 5.8 percent. In 2023, the economy is seen to expand by 5.5 percent.
World Bank noted that the Philippines is seeing “a regressive recovery.”
Across Southeast Asia, Vietnam and Lao had returned to pre-pandemic levels last year, while Indonesia is expected to pull a level of GDP seen before the coronavirus crisis this year.
On the other hand, Cambodia and Malaysia will likely be back to their pre-pandemic levels in 2022.
Meanwhile, the Philippines along with Thailand, and Myanmar are on pace to return to their pre-pandemic growth only in 2023, according to the World Bank.
“[Economic] output in Indonesia and Malaysia had come close to pre-pandemic levels, while Thailand and the Philippines were further away, but now all of them are showing signs of slowing down,” the World Bank report said.
As the Philippine economic recovery is seen to move at a much slower pace, the World Bank said it will drag down the rate of reduction in the number of people living in poverty in the country.
“A regressive recovery in Indonesia and the Philippines would mean slower declines in poverty and a smaller expansion of the economically secure class, which can already be observed by 2023,” World Bank said.
In the Philippines, the World Bank report indicated that poverty would decline 2.1 points more slowly, and the economically secure class would grow by only 2.9 points compared to 4.8 points.
“This represents 2.4 million fewer people escaping poverty and 2.1 million fewer people rising into economic security in the Philippines by 2023,” the bank said.
Likewise, the World Bank said the COVID-19 vaccine rollout in the Philippines is happening more slowly than expected.
“Widespread vaccination with safe and effective vaccines is a necessary condition for a sustainable economic recovery,” the World Bank said..
But the Philippines “can vaccinate more than 60 percent” of its population by the first half of 2022, the World Bank said. This estimate is beyond the Duterte administration goal of inoculating 70 percent of Filipinos by the end of 2021.
Meeting the vaccination target “will require a major effort to acquire vaccines, distribute them, and persuade people to be vaccinated,” the bank said.