Maybank: PH economic recovery from COVID-19 still ‘nascent’

Economic recovery in the Philippines is nascent, or still emerging, as the country loosens up the most restrictive COVID-19 lockdown in Asia, according to a report of the Malaysian financial giant Maybank.

“The Philippines and Indonesia are still facing high daily COVID-19 cases although there are tentative signs that the outbreak may have peaked,” said the report, titled “Asean Economics: Unlocking the Economy.”

The report noted that the Philippines started loosening a two-month lockdown last May 16 while Indonesia planned to do it in five stages starting in June to restore “business as usual” by end of July.

Maybank said recovery was fastest in Malaysia, Thailand and Vietnam, but “largely absent” in Singapore.

In the case of the Philippines and Indonesia, “the recovery is nascent,” Maybank said.

Citing the Oxford COVID-19 Government Response Stringency Index, the Philippines had the most restrictive lockdown in Asia, with a score of 93.5 between Jan. 1 and May 25 this year.

The index, developed by the University of Oxford’s Blavatnik School of Government, was “a composite measure based on nine indicators.”

These indicators were school closures, workplace closures, public gathering bans, travel restrictions and public transport operations, Maybank said.

In the same index, Singapore scored 81.5; Myanmar, 80.6; India, 79.2; Thailand, 78.7; Indonesia, 70.8; Malaysia, 69.4; Vietnam, 65.7; China, 64.4; and Laos, 54.6.

Citing Google COVID-19 community mobility reports, Maybank said the Philippines’ retail and recreation sectors were expected to also have nascent recovery as the lockdown is loosened up.

Citing separate Apple mobility trends reports, Maybank said driving and walking traffic was bottoming out as malls reopened.

Recovery in the Philippines, the report said, “is still nascent as public transport remains unavailable.”

As the number of daily new confirmed cases in the Philippines remained high at above 200, there may be more caution among consumers to venture out compared to Malaysia and Thailand where new cases have fallen significantly.

Authorities also warned that they will crack down on malls that fail to impose “crowd control,” Maybank said.

Across Asean, Maybank sees domestic travel bouncing back to compensate for an expected lull in foreign visitors amid the pandemic.

“Domestic tourism will likely recover first as borders stay closed, as seen in the cases of China and South Korea,” the Maybank report said.

“Domestic tourism accounts for a significant 88 percent of total visitor receipts in the Philippines, 50 percent in Malaysia and 40 percent in Thailand,” it said.

“In the Philippines and Malaysia, the share of domestic tourism revenue has been rising steadily over the years whereas international tourism revenue has underperformed,” Maybank said.

Edited by TSB