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Philippines’ coronavirus missteps could make it Asia’s economic ‘laggard’ as recovery seen among region’s slowest
- Over the last decade the Philippines had managed to harness its 109-million strong population to drive forward a consumption-led economy
- But the pandemic has exposed structural weaknesses that an outsourcing boom and remittances from legions of citizens working abroad papered over
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Snaking queues at Manila food banks have become a common sight as the economy continues struggling a year after the Philippines’ first coronavirus lockdown. It is a sharp contrast to 2018, when hundreds lined up for the grand opening of Uniqlo Co.’s Global Flagship Store in Manila, its largest outlet in Southeast Asia.
Over the last decade the Philippines had managed to throw off its mantle as the “sick man” of Asia, with its 109-million strong population driving a consumption-led economy. An outsourcing boom and remittances from legions of citizens working abroad helped raise incomes and lifted at least 2 million Filipinos out of poverty.
But the pandemic has exposed structural weaknesses that the boom papered over, including a decentralised health care system and rampant inequality. The Philippines suffered a record economic slump last year and its sluggish recovery was underscored again on Tuesday, when the government cut its growth outlook for this year and next.
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“There’s not much momentum left in this once juggernaut economy,” said Nicholas Mapa, economist at ING Groep NV in Manila. Consumer sentiment is “deep in the red” amid high unemployment and underemployment, he said.
The Philippine economy will not return to pre-pandemic levels until the end of 2022, said Katrina Ell, an economist at Moody’s Analytics Inc. in Sydney. In contrast, China, Taiwan and Vietnam already have returned to previous output levels, while South Korea, Indonesia and Thailand should do so this year, according to Ell. “This makes the Philippines the clear laggard in Asia,” she said.
02:02
Hungry Filipinos in lockdown share food as nation’s Covid-19 caseload surpasses 1 million
Hungry Filipinos in lockdown share food as nation’s Covid-19 caseload surpasses 1 million
Though it implemented one of the world’s strictest lockdowns – including a shutdown of mass transport and a ban on children and old people in public spaces – Philippine authorities only managed to quell the outbreak for a few months before a fresh surge in cases in March forced renewed restrictions.
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