Moody’s Analytics sees rising Covid cases, vaccine shortage as key reasons
The Philippines will be one of the weakest performers in the Asia-Pacific region this year as the country struggles to contain the spread of coronavirus disease 2019 (Covid-19) and faces a severe vaccine shortage, Moody’s Analytics said.
In a report released on Monday, Moody’s Analytics said the situation in the country is “dire,” further noting that the government was not able to bring down the number of Covid-19 cases appreciably and currently suffers under a new peak caseload.
“The Philippines is the laggard of the entire region as a record-high number of new Covid-19 cases has led to a resumption of strict lockdowns in metro Manila, and the country faces a severe shortage of vaccines,” said Moody’s Analytics.
“The lack of control of the pandemic, the inability to acquire vaccines, and the relative distance from export supply chains all factor into the outlook for the Philippines to be among the weakest in the region,” it added.
Moody’s said the Philippines and Thailand, which are less dependent upon goods exports and have seen little improvement in the pace of goods they export, will have to depend on the eventual opening of international travel and tourism.
In the case of the Philippines, Moody’s Analytics said the country will depend on service exports such as business processing and software services.
“The Philippines has a modest, roughly equal exposure to both export destinations and should see strengthened demand for its service exports,” said Moody’s Analytics.
According to Moody’s, China, Taiwan and Vietnam are the leading economies in the region.
The report said that while the Philippine economy is projected to grow by 6.3 percent this year, this is mainly due to low base effects.
“Expected growth rates in India and the Philippines are also strong, but this is partly due to very low base effects, as they were the two hardest-hit economies last year because of their strict and lengthy economic shutdowns,” it said.
“Further, given the resurgence of new Covid-19 cases — record highs in both countries over the past month — India and the Philippines are at greatest risk of underperforming during the coming year,” it added.
Last year, the Philippine economy contracted by 9.6 percent due to the combined effects of the pandemic, the Taal Volcano eruption and several strong typhoons that hit the country.
Moody’s Analytics said the speed of Covid-19 vaccination across the region would also determine the pace of economic recovery.
Singapore will likely achieve herd immunity within the year while the Philippines, Japan, South Korea and even China may not achieve such until 2023.