The Philippines is seen avoiding a slowdown in its economic rebound in the third quarter amid relatively lower COVID-19 infections compared to its neighbors suffering from surges and with mass vaccination picking up, UK-based think tank Pantheon Macroeconomics said.
The Philippines would also likely join Indonesia and Thailand in achieving herd immunity by next year instead of 2023, Pantheon Macroeconomics senior Asia economist Miguel Chanco said in a report Monday.
“Like India, the Philippines bore the brunt of its second wave in the second quarter, so its economic recovery is unlikely to face acute virus headwinds in the current quarter,” Chanco said.
Pantheon Macroeconomics had projected the Philippines’ gross domestic product to have grown 15 percent year-on-year during the second quarter mainly due to last year’s trough when GDP shrank by a record 16.9 percent at the height of the most stringent COVID-19 lockdown in the region which stopped 75 percent of the economy.
For the third quarter, Pantheon Macroeconomics sees GDP growing by 9.2 percent to reverse the 11.4-percent drop a year ago.
But Chanco cautioned that “the picture in the archipelago [the Philippines] remains more fragile than in Asia’s largest democracy [India].”
“The Philippines’ case-count is proving very sticky, at around 45 percent of the mid-April peak, while the test-positivity rate continues to hover dangerously in the low double-digit range,” Chanco noted.
“For now, though, the ongoing, if gradual, increase in the mobility indicators for India and the Philippines lies in stark contrast to the rolling back of near-normality in other emerging markets,” he added.
In contrast, Chanco pointed out that despite the recent surge in cases in Indonesia, Thailand and Vietnam due to the more contagious Delta variant of COVID-19, these three countries had imposed mostly localized quarantine restrictions, although tighter now than before.
For Chanco, the speedier mass inoculation in most parts of emerging Asia, except Vietnam, augured well to reaching herd immunity against the deadly coronavirus.
“Immunity now looks set to be achieved much earlier in big parts of Asean, thanks to quicker jabs and higher rates of protection from prior infection. We maintain that India will achieve this goal in the current quarter,” he said.
“But first-quarter immunity in Thailand and Indonesia is now in the realm of possibility, ahead of the second- and third-quarter dates we previously had pencilled-in, while the Philippines’ 2022 should no longer be written off,” he added.
Pantheon Macroeconomics earlier projected herd immunity — 85 percent of the population vaccinated to be better protected from the Delta strain — in the Philippines achieved by 2023, a longer time than most of its neighbors.