The Philippine economy is seen to remain in a “fragile” state in the first half of 2021 even as the mass vaccination against COVID-19 and the rollout of massive infrastructure projects would aid rebound in the near term, an official of the Manila-based Asian Development Bank (ADB) said on Wednesday.
In an online roundtable discussion, ADB country director for the Philippines Kelly Bird pointed to the uncertainty caused by the pandemic globally and locally, and it did not help that the Philippines had yet to flatten the virus infections curve. Bird said the prolonged quarantine would delay the opening of the economy and its recovery from the pandemic-induced recession.
The ADB will release its updated economic forecasts for the Asia-Pacific region next week. Last December, it projected the Philippines’ gross domestic product (GDP) to grow by 6.5 percent in 2021, within the government’s 6.5-7.5 percent target range.Last year, the Philippines suffered its worst post-war recession as the GDP shrank by a record 9.6 percent mainly due to the longest and most stringent COVID-19 lockdown in the region.But Bird said public spending, especially on infrastructure, would drive the return to economic growth moving forward.“This is where, in a way, the Philippines is much better placed than a lot of other countries because the government [put in place] the ‘Build, Build, Build’ infrastructure program. In times like this, infrastructure investments are critically important for recovery,” Bird said, citing the additional jobs these projects generate and their linkages to the overall economy.The government had programmed to spend P1.17 trillion, equivalent to 5.9 percent of GDP on public infrastructure this year and another P1.15 trillion or 5.1 percent of GDP next year.“A lot of large, complex projects will come onstream this year … That will help support recovery this year and next year,” Bird said.
Some of the $3.57-billion worth of Philippine programs and projects to be financed by the ADB this year included railways, transport systems, sustainable tourism, flood control, sanitation and irrigation.
Bird is bullish about the “up and running” vaccination program in the Philippines.
The ADB and the Beijing-based Asian Infrastructure Investment Bank cofinanced $700 million out of the Department of Health’s $714.57-million second health system enhancement to address and limit COVID-19 (Heal 2) project to buy vaccines.
In the same forum, Finance Undersecretary Mark Dennis Joven said the combined $1.2 billion (about P58 billion) in loans obtained by the Philippines from multilateral lenders and the P82.5 billion set aside for the nationwide vaccination program were already enough to buy 140 million doses of the vaccine to cover 70 million Filipinos, or the entire adult population in the country. INQ