The World Bank has revised downward its Philippine gross domestic product (GDP) growth estimate for this year, saying the containment of the coronavirus disease 2019 (Covid-19) remains a challenge for the country.
In a virtual briefing on Friday, Aaditya Mattoo, chief economist for East Asia and the Pacific at the World Bank, announced that the Washington-based multilateral lender now estimates the economy growing by only 5.5 percent, weaker than its earlier forecast of 5.9 percent.
The adjusted outlook falls outside the government’s official projection range of 6.5 to 7.5 percent, but a reversal of the economy’s 9.5-percent contraction last year.
Mattoo said the slow pace of vaccinations could take away 1 percentage point from the country’s GDP growth this year.
It can be noted that the government has committed to inoculate at least 70 million Filipinos or 100 percent of the adult population within the year. But, so far, only medical workers have received the vaccines donated by the private sector.
“The big problem in the Philippines is the people’s hesitancy on the vaccines, and the government’s struggle to do large-scale vaccinations. Also, the slow pace of vaccination could also result in the emergence of new variants of the virus,” Mattoo warned.
In the report, the World Bank said the economic impact of Covid-19 would continue to affect the livelihoods of Filipinos.
“In the Philippines, where containing the virus remains a challenge, households in the richest quintile are less likely to report earnings declines and those who do, report lower losses than their poorer counterparts,” it explained.
The multilateral institution added the welfare effects of income and employment losses in terms of depletion of physical and human capital are also more dire among the poor.
“For example, when faced with income losses, poorer households are more likely to reduce their food consumption, accumulate debt, and sell assets, all of which may undermine their ability to recover from the crisis,” it also emphasized.
Since mid-March, the country has seen the daily Covid-19 infection toll consistently surpassing the 5,000 mark, prompting the national government to place the National Capital Region, Bulacan, Cavite, Laguna and Rizal under the general community quarantine (GCQ) from March 22 to April 4, 2021.
Going forward, the World Bank said the challenge for the Philippines is to procure and distribute sufficient vaccines and to address any vaccine hesitancy among people through effective information campaigns.
It added that prospects for Philippine economic recovery are conditional on its ability to inoculate enough people to control risks to public health and the economy.
“In the Philippines, growth is expected to recover in the medium term, contingent on an improved external environment, a successful vaccination program, and the loosening of movement restrictions,” the lender pointed out.
Meanwhile, the World Bank said the developing economies of East Asia and the Pacific are facing a markedly uneven recovery. Growth in the region is seen to surge from an estimated 1.2 percent in 2020 to 7.5 percent this year.