PH economy still most vulnerable to COVID-19 – London-based Oxford Economics

MANILA, Philippines — Although the Philippines showed improvement in its management of its COVID-19 situation, analysts still see steep economic challenges with one think tank saying the country remains the most vulnerable among 56 economies.

In a Jan. 14 report, the London-based Oxford Economics said that compared with its assessment in October, “the biggest improvements were in Bangladesh, Egypt, New Zealand and the Philippines.”

But the Philippines’ 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 assessment.

P3B loss per week

At the other end of the list was Norway, which was deemed the least vulnerable to the prolonged pandemic, according to the study by economists Gabriel Sterne and Yash Adwani.

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.

The Philippine government has estimated output losses of P3 billion per week under alert level 3 in areas accounting for at least half of the economy.

Laggard in mass vaccination

The view of the research arm of investment banking giant Goldman Sachs was not much different.

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

While Goldman Sachs projected Philippine GDP growth at 7.1 percent this year, it also remained Asia-Pacific’s laggard in mass vaccination, with only 54 percent of its population fully vaccinated as of Jan. 13.

Government data showed that the unemployment rate fell to 6.5 percent in November 2021 —the lowest since the start of the pandemic in March 2020.

Nonetheless, Goldman Sachs 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 to 6 week wave that then subsides.

“This implies economic activity should largely normalize in the second quarter,” Goldman Sachs said.

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 jobless rates than the Philippines.