As the Philippines kept existing COVID-19 quarantine restrictions while awaiting mass vaccination to start, its gross domestic product (GDP) would likely grow at a slower pace in the first quarter of 2021 compared to the increase in output during the fourth quarter of 2020.
In a statement on Tuesday, Acting Socioeconomic Planning Secretary Karl Kendrick Chua said the state planning agency National Economic and Development Authority (Neda), which he heads, “supports the recent decision of the President not to shift to MGCQ” or modified general community quarantine—the least stringent level of restrictions imposed to prevent the deadly COVID-19 virus from further spreading.
Last week, Chua urged President Duterte to place the entire Philippines under MGCQ to address the higher incidence of hunger and joblessness in areas under stricter quarantine, which included business and financial hub Metro Manila, amid a still elevated number of COVID-19 infections.
Chua told the Inquirer on Sunday that a uniform, nationwide MGCQ would allow as much as 95 percent of economic activities to operate.
But the President on Monday night said the whole country could not move to a lesser degree of quarantine without a mass vaccination program in place.
As such, Chua said “the whole of government will work hard, in cooperation with various sectors, to roll out the vaccine so that we can further open the economy.”
In a Feb. 22 report, UK-based Oxford Economics projected the Philippines’ GDP to eke out about 1 percent quarter-on-quarter growth during the first quarter.
Economic scars
However, this increase in output would be slower than the 5.6-percent quarter-on-quarter growth posted in the fourth quarter of last year.
The Philippines would nonetheless be among a few countries whose first-quarter GDP would exceed the previous quarter’s output as Oxford Economics said “a large number of economies that expanded in the fourth quarter [of 2020] are expected to shrink in the first quarter [of 2021].”
In a separate Feb. 22 report, Oxford Economics head of global strategy and emerging market macro research Gabriel Sterne and economist Tianchen Peng pointed to upside risks to GDP in bigger emerging markets such as the Philippines, Brazil, Egypt, India, Indonesia, Mexico and South Africa.
However, economic scars wrought by COVID-19 may be longer to heal in the Philippines, Colombia, Peru and Spain, they said in the report “Short-sighted markets underplay long COVID scarring.”
UK-based Capital Economics on Tuesday added that while new coronavirus cases seemed to have peaked in the Philippines, Indonesia and Malaysia, “the slow vaccine rollout means that restrictions will need to remain in place for longer, holding back the economic recovery” in these three countries.
Capital Economics pointed out that mass inoculation has yet to start in the Philippines. INQ