The World Bank (WB) predicted that the economic recovery of the Philippines will be much slower than most of its regional peers as the COVID-19 situation remains uncontrolled.
The multilateral lender estimated that the country will contract by 6.9% in 2020, among the sharpest declines in developing East Asia and the Pacific. In a worst-case scenario, it may sink by as much as 9.9%.
World Bank Senior Economist Rong Qian said the country will only see economic growth bouncing back to pre-pandemic levels by the 4th quarter of 2021.
Assuming that no major spikes in COVID-19 cases will lead to further lockdowns, the Philippines is expected to rebound to 5.3% and 5.6% growth in 2021 and 2022, respectively.
In this scenario, businesses and households regain confidence, and the government continues the rollout of its infrastructure program, said Qian.
Noting that the Philippines “has gone on a cycle of repeated strict lockdowns and reopenings,” the World Bank report pointed out: “Indonesia and the Philippines face uncertain prospects. The region’s two most populous countries after China have not so far succeeded in controlling the pandemic.”
“Indonesia has not imposed strict lockdowns and seems to be relying on softer measures, while the Philippines has gone on a cycle of repeated strict lockdowns and reopenings,” it added.
The report stressed that poverty in the region is projected to increase for the first time in 20 years, with as many as 38 million people expected to remain in or be pushed back into poverty due to the pandemic.