Philippines: World Bank Lowers Growth Expectations over COVID-19

The Philippine health department reported that daily COVID-19 infections hit a daily high on Friday amid a surge in local cases, as the World Bank lowered economic growth expectations for the Southeast Asian nation because of the pandemic.

As many as 9,838 new cases were recorded Friday, bringing the nationwide total of those who have been infected with the coronavirus to 702,856, according to health-department data.

“The Philippines experienced the sharpest contraction of output among the largest economies of the region,” said a report by the World Bank as the international financial institution dropped expectations for Philippine growth to 5.5 percent.

“The contraction reflected an uncontrolled COVID-19 outbreak combined with strict nationwide lockdowns and mobility restrictions, a succession of natural disasters and delays in budget execution which weighed on public investment,” the report said.

The Philippines began its inoculation program at the start of March, but only 1.12 million vaccine doses have arrived and slightly more than 500,000 of the country’s 110 million people received their first dose of the vaccine as of March 23.

The vaccination program is relying on doses donated by China and the World Health Organization through the Vaccines Global Access (COVAX) Facility. 

On Thursday, the spokesman for President Rodrigo Duterte challenged local officials who were getting vaccines targeted for first responders and other health workers, adding that the country stood to lose millions of doses from the COVAX facility. 

“To all the mayors, stop it already. If you continue skipping the line, we might lose about 44 million dosages of COVAX Facility vaccines,” spokesman Harry Roque said. 

The government identified the mayors as Alfred Romualdez of Tacloban City, Leyte province, Dibu Tuan of T’Boli and Sulpicio Villalobos Santo Niño in South Cotabato province, Noel Rosal of Legazpi, Albay province and Abraham Ibba of Bataraza, Palawan province.

Manila’s Department of the Interior and Local Government ordered them to explain why they got the shots and threatened they could be prosecuted if they violated rules.

Soft lockdown

The Philippines has been hitting all-time high daily records since the middle of this month, a year after Duterte imposed varying degrees of lockdowns in the country to combat the coronavirus pandemic. Close to 55,000 people have been infected since March 20.  

Physician Tony Leachon, who had served on the government’s team handling the pandemic, called for reverting to tighter government restrictions, including stay-at-home orders, to control the surge.

“Prematurely opening the economy without much testing and contact tracings resulted in social mobility, relaxed restrictions coinciding with the arrival of the new variants, in a time that we have limited vaccine supply,” he said.

Duterte resorted to the use of law enforcement – curfews and police checkpoints – to fight the pandemic. His administration most recently restricted movements in Metro Manila and four neighboring provinces through Easter Sunday, April 4. 

Church activities were restricted for Holy Week beginning with Palm Sunday, March 28, prompting a bishop to question the government.

The archdiocese in the predominately Catholic nation lamented the lack of consultation, even as it vowed to defy the ban on religious activities. Roque, meanwhile, warned the clergy that the government would not hesitate to force churches to close.  

The government however relented on Friday, announcing it would allow once-a-day gatherings in churches while limiting capacity to 10 percent.  

World Bank  

Also on Friday, the World Bank, in its East Asia and Pacific Economic Update April 2021 report, downgraded its economic growth projection for the Philippines to 5.5 percent for this year from its outlook of 5.9 percent in December 2020.

Manila “has been less successful in the region in transitioning away from shutdowns to a more efficient containment strategy,” said Aaditya Mattoo, World Bank chief economist for East Asia and the Pacific.

Mattoo said the country’s “tough response,” referring to region-wide community quarantines, “has imposed a big cost on the economy without delivering a commensurate benefit in terms of containment of the disease.”

The report noted that Malaysia, despite political uncertainty, was expected to see its economy recover to a pre-pandemic level of 6.0 percent for 2021, conditional on a successful rollout of vaccines.

Indonesia is expected to see its economy recover to a pre-pandemic level of 4.4 percent while Thailand is projected to fall to 3.4 percent, a figure below the pre-pandemic level for 2021, according to the World Bank.