UK think tank: PH to be among last in Asia Pacific to reopen
MANILA, Philippines—While the Philippines needed to reopen its borders to jumpstart the travel and tourism sector, its readiness to dismantle COVID lockdowns was among the last in Asia Pacific, according to UK-based think tank Oxford Economics.
Oxford Economics’ lockdown easing scorecard assigned an overall reopening score of negative 0.1 for the Philippines, ranking 10th out of the 14 countries covered by its report released on Tuesday (Nov. 16).
The Philippines ranked only better than Vietnam, Indonesia, Taiwan and India in terms of likelihood to relax restrictions, based on vaccination rate, COVID-19 prevalence, and economic stress.
“The tighter the restrictions today, the greater the scope for faster relaxation,” said Oxford Economics lead Asia economist Sian Fenner.
Oxford Economics said Malaysia was the “top reopening contender in terms of easing restrictions due to its high vaccination status and the economic cost of strict lockdowns.” Australia and New Zealand placed second and third.
Malaysia had nearly 70 percent of its population fully vaccinated to date. At over 20 percent, the Philippines had the fourth lowest vaccination rate after cellar-dweller Vietnam, India and Taiwan.
As of end-September, the Philippines’ gross domestic product (GDP) was less than 6-percent lower than pre-pandemic levels—the second-lowest in the region, with Malaysia ranking the worst due to national lockdowns during the third quarter which returned the country to an economic recession.
But the Philippines remained with the biggest estimated shortfall in growth trend by 2025 compared to pre-pandemic projections—its economic growth four years from now would be about 2-percent below the potential expansion had the COVID pandemic not happened.
Oxford Economics noted that the Philippines already shifted to “granular” lockdowns to restart more economic activities while limiting stringent restrictions to areas seeing a surge in COVID infections.
“The economic imperative for Thailand and the Philippines to ease limitations is high, given their dependency on tourism and the mounting economic cost of restraints,” Oxford Economics said.
“This is driving policymakers to reopen borders, but domestic restrictions are likely to be eased gradually given low vaccination rates,” it added.
The tourism sector’s direct and indirect contributions accounted for about 25 percent of the Philippines’ GDP, the biggest in the region.
Oxford Economics’ latest estimates showed that the output of the Philippines’ hospitality-driven sectors like accommodation and food services were about 50-percent below pre-pandemic levels.
“While our scorecard suggests the pace of easing varies in the region, there’s significant scope for economies to benefit from a shift to living with COVID-19 following a series of on-again/ off-again restrictions that have resulted in the stalling of recoveries this year,” Oxford Economics said.
“We expect a lifting of restraints and resumption of domestic tourism will boost consumption, particularly on services such as accommodation and dining,” it added.
“Indeed, we expect services to underpin above-trend GDP growth in 2022 across the region, including Thailand and the Philippines, where the easing in domestic restrictions will be more gradual,” it said.
Oxford Economics expects India and the Philippines to post the fastest GDP growth rates of above 7 percent in 2022.
In a separate report, the Washington-based World Bank said the continued decline in COVID cases following a Delta strain-induced peak in September augured well for further economic reopening.
But the World Bank said the Philippines remained a laggard in mass vaccination in Southeast Asia.
“Vaccine rollout improved to 760,000 per day (seven-day average) as of Nov. 10 from 460,000 in October, but continued to substantially lag Indonesia, Malaysia, Thailand, and Vietnam,” World Bank said.
“The government attributes the slower pace of vaccination to vaccine hesitancy and logistics issues in provinces,” it added.
