The forthcoming 2022 presidential election would add to risks slowing the Philippines’ recovery from the COVID-19-induced recession such that it will be among the last in the region to revert to its prepandemic growth path.
In a report on Wednesday, Moody’s Analytics chief Asia-Pacific economist Steven Cochrane and associate economist Sonia Zhu said that in Asia-Pacific, “Thailand and the Philippines will be the last to reach their expansion milestones.”
In the case of the Philippines, Moody’s Analytics blamed prevailing concerns on the prolonged quarantine restrictions, which dampened business and consumer sentiment, modest fiscal stimulus, delayed rollout of big-ticket infrastructure projects as well as a slow vaccination program.
“Solutions to all these issues in the Philippines will be sought as it enters a year of contentious political debate with the approach of the May 2022 presidential election,” Moody’s Analytics said.
Given the still elevated numbers of COVID-19 infections in the Philippines, Indonesia and Malaysia, Moody’s Analytics said these three countries “may require more fiscal support since they also run risks of additional quarantines or movement controls in coming months.”
It did not help that the Philippines and Thailand are dependent on their tourism industries, which continue to reel from border and travel restrictions amid a protracted pandemic, Moody’s Analytics added.
In terms of vaccination, Moody’s Analytics noted that the Philippines, Indonesia, Thailand and Vietnam have yet to procure COVID-19 vaccine doses to inoculate up to 80 percent of their respective populations, which experts believed is the level needed to achieve herd immunity.
Moody’s Analytics, nonetheless, acknowledged some strides in vaccine procurement—“As of mid-January, for example, the Philippines had only procured enough vaccines for about 30 percent of its population. It is now up to 43 percent.”
Post-pandemic, the Philippines and India will experience “rapid growth rates” coming from a low 2020 base, Moody’s Analytics said. The Philippines last year fell into its worst post-war recession as gross domestic product (GDP) shrank by a record 9.5 percent.
Moody’s Analytics had projected the Philippines’ GDP to grow by 6.2 percent this year, below the government’s 6.5-7.5 percent target range.