The global spread of the COVID-19 disease would inflict economic and social difficulties to emerging markets like the Philippines, to be made worse by prevalent limitations in health care systems as well as reliance on bigger economies, UK-based Oxford Economics said.
“The COVID-19 pandemic will badly hit all emerging market economies. Limitations in health care, fiscal buffers and economic structure typically make emerging markets more vulnerable to major external shocks,” Oxford Economics said in a March 24 report titled “EM coronavirus rankings—bad for all, awful for some.”
Oxford Economics noted that during the 2009 financial crisis, emerging markets “suffered a bigger hit to activity” than advanced economies given that “the structure of their economies and lower buffers typically make them more vulnerable to major external shocks.”
“This time around, emerging markets will also suffer disproportionately. This was first evident in financial markets, as global investors sought safe havens for their capital and withdraw from emerging markets. But worse is to come given the gigantic disruptions to domestic supply and domestic and global demand,” Oxford Economics said.
In a scale of one (lowest risk) to 10, Oxford Economics placed the Philippines at about six in terms of overall social and economic vulnerability to COVID-19.
Among the seven Asian countries covered by the report, India was deemed most vulnerable, followed by Vietnam, the Philippines, Malaysia, Thailand, Indonesia and China.
“Asian emerging markets suffer relatively stretched health care and broadband capacity,” Oxford Economics noted.
Oxford Economics said tourism was “likely to suffer most” among vulnerable sectors, such that the Philippines, Thailand and Croatia “will be particularly affected as tourism receipts plunge.”
Based on Oxford Economics estimates, tourism contributed 25 percent to the Philippines’ gross domestic product. —BEN O. DE VERA