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

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

In a Jan. 14 report, Gabriel Sterne, head of global strategy services and emerging markets macroeconomic research at Oxford Economics, and economist Yash Adwani said that compared to the previous COVID Vulnerability Dashboard -19 in October 2021, “the biggest improvements were in Bangladesh, Egypt, New Zealand and the Philippines.

However, the Philippines’ COVID-19 vulnerability score – above 5 on a scale where zero signified the least vulnerability – remained the highest among the 56 advanced and emerging markets covered by the January 2022 scorecard.

At the other end of the list was Norway, which was considered the least vulnerable to the prolonged pandemic.

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

It didn’t help that the Philippine economy was heavily dependent on the travel, tourism and hospitality sectors, which had a combined share of 13% in the scorecard.

Direct and indirect contributions from the tourism sector accounted for around 25% of the Philippines’ gross domestic product (GDP) – the largest in the region, according to previous estimates from Oxford Economics.

Globally, Oxford Economics said wealthy countries or advanced economies tend to bear the brunt of the continued rise in infections caused by the more contagious strain of Omicron.

“Omicron has caused a significant shift 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 started spreading,” said Oxford Economics.

“The largest deterioration in overall vulnerability since October has occurred 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 have been tightened 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 production losses at 3 billion pesos per week under alert level 3 in areas representing 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 caseloads in Australia and the Philippines.

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

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

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

However, Goldman Sachs continued to call the Philippines an Asia-Pacific laggard when it comes to mass vaccinations, with only 54% of its population fully vaccinated as of January 13.

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

In its latest employment report last Friday, the national planning agency of the National Authority for Economy and Development (Neda) said that “amid the threat of new variants of COVID-19, there is necessary to continue our risk management approach,” referring to the change to treat the virus as endemic.

“The government’s policy of moving 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 contacts and crowded spaces,” Neda said.

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

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

“The accelerated implementation of the alert level system and the Prevent, Detect, Isolate, Treat and Reintegrate + Vaccinate (PDITR+V) strategy, and the expansion of public transport capacity will be essential to support the recovery. “, Neda said.

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

“This will complement the Philippine Disaster Risk Reduction and Management Act. Additionally, a “pandemic playbook” will bring together all the lessons we have learned in nearly two years of battling COVID-19,” according to Neda.

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