UK think tank: PH economy still most vulnerable to COVID-19

MANILA, Philippines — Although the gradual lifting of restrictions improved the Philippines’ score, it remained as the most vulnerable country to COVID-19 in the latest scorecard of UK-based think tank Oxford Economics.

In a Jan. 14 report, Oxford Economics head of global strategy services and emerging market macro research Gabriel Sterne and economist Yash Adwani said that compared with the previous COVID-19 vulnerability scorecard in October 2021, “the biggest improvements were in Bangladesh, Egypt, New Zealand, and the Philippines.”

However, the Philippines’ COVID-19 vulnerability score — at over 5 in a scale where zero meant the least vulnerability — remained the highest among the 56 advanced and emerging markets covered by the January 2022 scorecard.

On the other extreme end of the list was Norway, which was deemed the least vulnerable to the prolonged pandemic.

In its updated scorecard, Oxford Economics assigned a weight of 15 percent to health infrastructure, 19 percent to health policy, 24 percent to epidemiology, and the biggest share of 42 percent to economic vulnerability.

It did not help that the Philippine economy relied much on the travel, tourism and hospitality sectors, which had a combined 13-percent share in the scorecard.

The tourism sector’s direct and indirect contributions accounted for about 25 percent of the Philippines’ gross domestic product (GDP) — the largest in the region, Oxford Economics’ earlier estimates had shown.

Globally, Oxford Economics said richer nations or advanced economies tended to take the brunt of the ongoing surge in infections caused by the more contagious Omicron strain.

“Omicron has caused a significant turnaround in the relative affliction of emerging markets and advanced economies — the latter having become relatively more affected. The pattern is similar to the situation a year ago when the Delta variant began to spread,” Oxford Economics said.

“The biggest deterioration in overall vulnerability since October has been in advanced economies (Canada, Sweden and Finland). The number of new COVID-19 cases or deaths has approached new highs in these countries, prompting the reintroduction of stricter lockdown measures,” the think tank said.

In the Philippines, restrictions were heightened to a stricter alert level 3 until the end of January in Metro Manila and neighboring provinces as well as many other areas with high COVID-19 cases. The government had estimated output losses of P3 billion per week under alert level 3 in areas accounting for at least half of the economy.

In a separate Jan. 14 report, the research arm of investment banking giant Goldman Sachs noted that the Omicron wave led to the highest level of pandemic case loads in Australia and the Philippines.

Goldman Sachs Economics Research nonetheless said that across Asia-Pacific, Omicron’s impact will “likely be short-lived in much of the region – with the early experience elsewhere (such as in South Africa, London and New York) suggesting a large 4-6 week wave that then subsides.”

“This implies economic activity should largely normalize in the second quarter. We therefore remain optimistic that the ‘late reopeners’ in the region — India and much of Southeast Asia, which faced the largest Delta waves and on average have the most spare economic capacity — can post strongly above-trend growth for 2022 as a whole,” Goldman Sachs said.

Goldman Sachs had projected the Philippines’ GDP to grow 7.1 percent this year, within the government’s 7-9 percent target but lower than its forecast of 7.3 percent before the Omicron variant spread in the region.

However, Goldman Sachs continued to tag the Philippines as Asia-Pacific’s laggard in mass vaccination, with only 54 percent of its population fully vaccinated as of Jan. 13.

In comparison, China has a vaccination rate of 90 percent as of last week; Singapore, 89 percent; South Korea, 87 percent; Australia, Japan and Vietnam, 80 percent; Malaysia and Taiwan, both 79 percent; New Zealand, 78 percent; Thailand, 73 percent; Hong Kong, 67 percent; India, 65 percent; and Indonesia, 63 percent.

In its latest employment report last Friday, the state planning agency National Economic and Development Authority (Neda) said that “amid the threat of new COVID-19 variants, there is a need to continue our risk management approach,” referring to the shift of treating the virus as endemic.

“The government’s policy to shift to the alert level system with granular lockdowns has been effective in containing the virus as it is designed around the 3Cs — closed spaces, close contact, and crowded spaces,” Neda said.

Government data showed that the unemployment rate fell to 6.5 percent in November 2021 — the lowest since the start of the pandemic in April 2020. Among developing economies in Asia, the Philippines’ jobless rate was lower than India’s 7 percent in November 2021 and matched Indonesia’s 6.5 percent in August 2021. But Vietnam (3.6 percent in December 2021), China (3.9 percent in September 2021), and Malaysia (4.3 percent in October) had lower unemployment rates than the Philippines.

Neda was optimistic that despite the current spike in COVID-19 infections, “emerging evidence has shown that it is causing milder symptoms as compared to other variants.”

“Accelerated implementation of the alert level system and the Prevent, Detect, Isolate, Treat, and Reintegrate + Vaccinate (PDITR+V) strategy, and expanding the public transport capacity will be key to sustaining the recovery,” Neda said.

Neda had proposed to Congress a pandemic flexibility bill, which it said will “ensure our resilience against future shocks.”

“This will complement the Philippine Disaster Risk Reduction and Management Act. Moreover, a ‘pandemic playbook’ will cull all the lessons we have learned over nearly two years of coping with COVID-19,” according to Neda.