Low vaccination rate in PH worries IMF

Ramping up mass vaccination to revive private consumption alongside increasing public infrastructure spending would help the Philippines recover from the pandemic-induced economic slump, the International Monetary Fund (IMF) said.

IMF Asia and Pacific department director Changyong Rhee told a press briefing Tuesday night that last year’s lockdowns hurt the Philippines more than other economies in the region due to its heavy reliance on tourism and many contact-intensive service sectors.

“At this moment, what we are worried about is that the Philippines’ vaccination rate is still around 25 percent—that seems to be low. In order to have a more sound and stronger demand, I think the vaccination pace must be the first priority,” Rhee said.

“Unless you have a higher number of the people vaccinated, you cannot truly maintain the containment policy because the economic impact could be very serious,” he added.

But Rhee said that if the Philippines could accelerate mass inoculation and contain the more infectious Delta strain of COVID-19, the Washington-based multilateral lender might revisit its downgraded 3.2-percent gross domestic product growth forecast for 2021.

Rhee was also hopeful that the Philippines could return to its prepandemic economic trend of 6-7 percent yearly growth rate with the help of the ambitious “Build, Build, Build” infrastructure program.

The IMF’s Regional Economic Outlook report for Asia and Pacific published last Tuesday noted that “Asean-5 countries (Indonesia, Malaysia, the Philippines, Singapore and Thailand) are still facing severe challenges from a resurgent virus and weakness in contact-intensive sectors.”

The IMF last week slashed its 2021 growth forecast for the Philippines to below the government’s downscaled 4-5 percent target range amid expectations of shallower economic recovery during the second half of the year.

The IMF also projected a 4.3 percent inflation rate and 7.8 percent unemployment rate for the Philippines, which were among the highest in the region.

In a report on Wednesday, think tank Moody’s Analytics noted that while most headline inflation rates in the region were below 2 percent, the Philippines and India had above 4 percent.