Maybank: PH herd immunity seen in May 2022 yet

MANILA, Philippines—The Philippines is seen achieving herd immunity in May 2022 yet, an election period, and could have its consumer-driven economy back to life after COVID lockdowns had been dismantled when efforts against the pandemic succeed, according to Malaysian financial giant Maybank.

Maybank Kim Eng analysts Chua Hak Bin, Lee Ju Ye and Linda Liu, in a report on Friday (Aug. 20), said judging from current vaccination rates, Singapore would reach herd immunity, or 70 to 80 percent of the population fully vaccinated, by next month.

The report, entitled “Asean Economics: Divergent Recoveries,” said Malaysia was expected to reach herd immunity in October, while the Philippines and Thailand would follow suit by May 2022.

Maybank noted that 14.8 percent of the targeted adult Filipino population already received at least one vaccine dose, while 11.8 percent were fully vaccinated as of Aug. 18.

The Philippines targets all adults for full vaccination by the end of 2021.

Indonesia and Vietnam would be at the tailend in the region as they were projected to vaccinate at least 70 percent of their population by July and August 2022.

Across Asean, “delays to vaccine deliveries could jeopardize these timelines,” Maybank said.

“Vaccinating the last 10-20 percent could also be more difficult as vaccination will have to climb the wall of hesitancy and reach populations in rural areas,” it added.

It did not help that more contagious coronavirus variants, like Delta, may make herd immunity an “elusive target.”

“Vaccination may reduce fatalities but does not meaningfully reduce infection. A permanent reopening may not be possible at 70-percent vaccination rate, if fatalities and hospitalizations remain high,” Maybank said.

“A potentially higher threshold — like 90 percent — for achieving herd immunity may prove to be an even bigger challenge to Asean countries, such as Indonesia, the Philippines and Vietnam, which are already struggling to achieve the 70-percent vaccination rate,” the report said.

“With the Delta variant estimated to be twice as transmissible, experts at the Infectious Diseases Society of America have suggested that the threshold for achieving herd immunity may have to be pushed higher to 80-90 percent, well above the previous estimate of 70 percent,” it said.

But once stringent quarantine restrictions end, Maybank expects the economies of the Philippines and Indonesia to benefit the most in the region.

“Both Indonesia and the Philippines have large domestic economies and a more permanent easing of lockdowns in 2022 will boost domestic demand and services.” Pre-pandemic, household consumption accounted for 68 percent of the Philippines’ gross domestic product (GDP), the highest in Asean and similar to Vietnam’s.

However, the road to economic recovery may be tougher for the Philippines as Maybank estimates showed the government had set aside direct fiscal support to fight the prolonged pandemic this year and next year amounting to only 1.6 percent of GDP — the lowest in the region.

Singapore’s fiscal stimulus against COVID-19 reached 11.8 percent of GDP; Thailand, 5.8 percent; Vietnam, 5.7 percent; Malaysia, 5.3 percent; and Indonesia, 3 percent, Maybank estimated.

Including indirect fiscal measures, Maybank pegged the Philippines’ COVID-19 war chest at P819.7 billion, or 4.2 percent of GDP, still the smallest in the region when measured against the size of the economy.

TSB