The Philippines has shown big improvements as far as reopening the economy is concerned but Oxford Economics says the country needs to double down on its vaccination if wants to make a huge economic leap.
ALTHOUGH the Philippines is no longer a laggard in economic reopening in the Asia Pacific, it still has to vaccinate faster for a stronger economic rebound.
London-based Oxford Economics said the Philippines now ranks 10th among 14 major economies in the Asia Pacific in terms of quick reopening of their economies.
The Oxford tally is based on current vaccination rates, COVID-19 prevalence, and economic necessity.
The Philippines got an overall reopening score of -0.1. Among the categories, it scored lowest in the vaccination rate at -0.5.
Latest data showed that only 34 percent of the population has been fully vaccinated, much lower compared to other major economies in the region.
Sian Fenner, Oxford lead Asia economist said most Asia-Pacific economies are shifting toward living with COVID-19, but the easing of restrictions can be expected to vary across the region.
“The economic imperative for Thailand and the Philippines to ease limitations is high, given their dependency on tourism and the mounting economic cost of restraints,” Fenner said.
“This is driving policymakers to reopen borders, but domestic restrictions are likely to be eased gradually given low vaccination rates,” she said.
Growing trend
Fenner emphasized that there is a growing shift in the region to treat COVID-19 as endemic and an acceleration in vaccination rates would help.
But she noted that vaccination is only one of several factors that will determine the timing and pace at which COVID-related restrictions are eased.
“The Philippines has a strong incentive to reopen. And despite still elevated daily infections, restrictions are easing,” Fenner said.
“It has also shifted toward ‘granular lockdowns’ and has announced plans to reopen its borders, as has Indonesia,” she said.
The government has placed Metro Manila and most of the provinces under Alert Level 2 until the end of the month. Under Alert Level 2, more businesses will be allowed to operate at a much higher capacity.
Local tourism
Further, Oxford expects that the lifting of restraints and resumption of domestic tourism will boost consumption, particularly on services such as accommodation and dining.
“Indeed, we expect services to underpin above-trend growth in 2022 across the region, including Thailand and the Philippines, where the easing in domestic restrictions will be more gradual,” Fenner said.
“The reopening of borders will help boost services activity next year. However, while our tourism colleagues expect a strong rebound in total visitors next year, from a very low base, we do not expect international visitors to return to pre-pandemic levels until 2025,” she said.
Based on Oxford’s scorecard, Malaysia, Australia and New Zealand are best placed to reopen given their progress on vaccination, falling or lower number of cases, and relatively large tourism sectors.
All three would also experience strong gains from an easing of curbs, given recent lockdowns.
Other countries that are expected to fare better in reopening include Korea, Singapore, Japan, Hong Kong, Thailand and China.
Meanwhile, Vietnam, India, Taiwan and Indonesia ranked below the Philippines.
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