Global investment banking giant Goldman Sachs has slashed its 2021 growth forecast for the Philippines to 8.4 percent due to slow COVID-19 vaccination rollout which would also make the country a laggard in achieving herd immunity against the deadly disease.
In a Jan. 11 report, Goldman Sachs Economics Research said it had tempered expectations for the Philippines from its earlier forecast of a 9.5-percent growth this year, no thanks to “tighter containment policy in the near term and slow vaccination progress in the medium term.”
Given a low base in 2020, Goldman Sachs’ gross domestic product growth projection for 2021 remained higher than the government’s 6.5-7.5 percent target.
“The Philippine government is aiming to inoculate 50-70 million Filipinos this year. However, the vaccination may only start in March, at the earliest, which is when Sinovac is expected to deliver its first shipment to the country,” Goldman Sachs economists Rina Jio, Jonathan Sequiera, Danny Suwanapruti and Andrew Tilton noted.
Data from Goldman Sachs Global Investment Research showed that while the Philippines targeted to vaccinate 100 percent of its population of 113 million, it had so far procured 76.6 million vaccine doses, including 25 million still under negotiations.
In the Association of Southeast Asian Nations (Asean), the Philippines and Indonesia led in terms of number of vaccine sources with seven each—the Philippines eyes supply from AstraZeneca, the global Covax facility, Gamaleya, Johnson & Johnson, Moderna, Novavax and Sinovac.
In terms of actual mass vaccination, “Singapore is likely to be the quickest to vaccinate its population while the Philippines is lagging,” Goldman Sachs said.
It said it did not help that in the Asean, Filipinos and Indonesians were among the most hesitant to get inoculated with COVID-19 vaccines, citing recent surveys.
“Larger populations, weaker health-care delivery, more complex logistics and lower indigenous production capabilities suggest that Indonesia and the Philippines could take longer to achieve herd immunity, with Indonesia getting there by the first half of 2022 and the Philippines by the third quarter,” it said.
Slow vaccination would weigh on the Philippines’ economic recovery, as Goldman Sachs noted that “industrial production has rebounded the fastest and is now closing in on pre-COVID-19 levels in most [Asean] countries with the exception of the Philippines.”
“For the Philippines, containment policy and mobility have not normalized as much as we had anticipated in the last few months, and recent activity data through November 2020 suggest the recovery has been much slower than we had expected,” it said. INQ