Oxford Economics: PH most vulnerable to COVID-19 shocks

PHOTO/Veejay Villafranca, Asian Development Bank

MANILA, Philippines—UK-based Oxford Economics ranked the Philippines as being most vulnerable to pandemic-induced shocks as a result of the low vaccination rate and prolonged mobility restrictions that prevent economic reopening.

Philippines’ COVID-19 vulnerability score — at about 6 on a scale where 0 indicates the least vulnerability — ranked first among the 42 advanced and emerging markets covered by the think tank’s October 2021 scorecard.

The least vulnerable included the United Arab Emirates (UAE), Canada, Norway, Chile and Finland; on the flipside, the cellar-dweller Philippines was joined by Bangladesh, Egypt, Pakistan and Greece in the bottom rung, Oxford Economics’ Oct. 28 report showed.

An economy’s overall vulnerability to COVID-19 was measured by Oxford Economics across the health infrastructure (including hospital beds and doctor density), economic structure, health policy (like vaccination rate, testing, contact tracing as well as lockdown stringency), and epidemiology (daily cases and deaths).

As of September, the Philippines recorded the worst mobility score due to its strict quarantine measures, followed by Australia and New Zealand.

“Asian and African economies have put more restrictions on mobility in place recently than other regions, hence Asian mobility scores are significantly weaker than other regions,” Oxford Economics noted.

In a range of one (with a high vaccination rate) to 10 (with a low vaccination rate), the Philippines scored eight.

Oxford Economics said that the scores of the Philippines, Pakistan and Egypt posted the “biggest deterioration” compared to a similar scoring in January.

In December last year, Oxford Economics said the Philippines was also among the most vulnerable to “long” scarring inflicted by COVID-19.

In last year’s report, the Philippines scored the highest among emerging markets – a seven out of 10 in the think tank’s vulnerability score across 31 metrics which measured policy offsets, economic and financial imbalances, health-related belief scarring, the structure of the economy, labor market vulnerability, and decline in gross domestic product (GDP) growth in 2020.

Oxford Economics said that, in general, advanced economies — rich countries — tend to be much less vulnerable to COVID-19 than emerging markets like the Philippines due to higher vaccination rates in developed nations.

In a separate webinar on Friday, Oxford Economics lead economist Sian Fenner noted that the Philippines was the worst hit in Asia by the pandemic-induced economic slump, with a record 9.6-percent GDP contraction — the worst recession post-war — posted last year.

Based on Oxford Economics’ latest estimates, the Philippines’ output gap remained the largest in the region at the end of the third quarter of 2021, with GDP still over 8-percent below its pre-pandemic level.

Fenner said the Philippines and Thailand, whose tourism sectors were badly hit by the pandemic, would only return to their pre-pandemic GDP levels by late 2022.

Furthermore, Fenner identified the Philippines as one of the Asian economies with a sluggish recovery largely because less than 70 percent of the population had been fully immunized, far below the threshold for herd immunity, which might have allowed greater economic reopening.

Until vaccinations rise, economic recovery would be under a cloud of uncertainty, Fenner said. Oxford Economics data showed that besides the Philippines, Indonesia, Taiwan, India, and Vietnam have vaccinated just around a fifth of their populations as of mid-October.

Fenner also flagged risks to economic rebound from the prevailing elevated consumer prices caused by food supply shocks, especially pork, in the Philippines.

Since it’s a high energy exporter, Fenner warned that rising global oil prices could become “another headwind to growth prospects” in the Philippines.