The COVID-19 pandemic shed $43 billion from the Philippine economy last year—the eighth-highest economic toll among 15 Asian economies, as the tourism- and services-dependent region suffered from lockdowns to contain the deadly coronavirus, the think tank Japan Center for Economic Research (Jcer) said on Monday.
The Singapore-based DBS Bank also expects the Philippines, alongside India and Indonesia, to be the region’s laggards in restoring their respective populations’ lost incomes due to the pandemic.
Jcer estimated the total economic losses in 15 Asian countries to have hit $1.7 trillion last year, or 5.7 percent of their combined gross domestic product (GDP).
Jcer defined economic loss as “the GDP that would have been achieved if the COVID-19 crisis had not occurred minus the GDP that has actually been obtained” amid the pandemic.
“Countries with high growth rates during ordinary times, such as India and the Asean-5, were impacted the hardest, and the decline was especially severe in the service industry, including food services and tourism,” JCER said.
Besides the Philippines, the top 10 economies which suffered from high losses due to COVID-19 included China ($638 billion), India ($480 billion), Japan ($162 billion), Indonesia ($154 billion), Thailand ($71 billion), South Korea ($47 billion), Malaysia ($44 billion), Singapore ($42 billion), and Hong Kong ($28 billion).
In the case of the Philippines, JCER’s estimates showed that its GDP would have risen to $405 billion in 2020 if the pandemic did not happen. Actual GDP last year declined to $362 billion amid the pandemic-induced recession, from $377 billion in 2019.
JCER noted that the Philippines’ services sector as a whole shrank by 9.2 percent in 2020; wholesale and retail trade contracted by 6 percent; transportation and storage, down 30.9 percent; and accommodation, food and beverages, down 45.4 percent.
“Countries that rely heavily on tourism acquire foreign currency through casinos. The pandemic has made it difficult to attract foreign tourists, forcing them to close their businesses. The Philippines has lifted the ban on online casinos, which were originally developed for foreigners, for its citizens. The resumption of travel traffic is necessary for the recovery of tourism revenue. In some Southeast Asan countries, it has just begun,” JCER noted.
The COVID-19 losses in Vietnam, Cambodia and Laos were the lowest, at only $15 billion, $4 billion, and $2 billion, respectively. Despite the pandemic, Taiwan and Myanmar grew their economies by $44 billion and $2 billion, respectively, compared to pre-pandemic projections.
In a separate report, DBS chief economist Taimur Baig and senior economist Radhika Rao said “India, Indonesia, and the Philippines have suffered setbacks in real per capita income; it will be mid-decade before the trend path of income is restored.”
DBS expects the Philippines’ GDP to grow by 4.2 percent this year, within the government’s downscaled 4-5 percent growth target.