An economist of Asean+3 Macroeconomic Research Office (AMRO) forecasts a recovery of the Philippine economy starting this year, given the stepping up of the government’s vaccination program.
In a virtual briefing on Thursday, AMRO chief economist Dr. Hoe Ee Khor said they slashed their 2021 growth forecast for the Philippines to 4.3 percent from 6.9 percent set last March due partly to the rise in the number of coronavirus disease 2019 (Covid-19) infections.
The AMRO also reduced its 2022 growth forecast for the domestic economy from 7.8 percent to 6.7 percent.
Amidst the lower growth projections for the two-year period, Khor said what is important is that the government has ramped up its vaccination drive against Covid-19.
He cited authorities’ target to inoculate around 80 percent of the population by the first quarter of next year.
“And that, I think, is going to be very important and good for the Philippines because the Philippines, unlike many of the countries in the region, is very much a service-oriented economy. And that’s the reason why they’ve been hit harder than some of the countries in the region,” he added.
Khor said the economy should be able to “bounce back quite sharply” once the economy opens up.
He said the country still has available policy space that can support the business community during the recovery phase.
“We have actually encouraged the authorities to use the policy space that they have to avoid the scarring of the economy and allow the businesses to bounce back faster,” he added.
Khor was confident that if authorities maximize the policy space, they would be able to achieve at least AMRO’s growth forecast for 2022.
“When that happens, I think, they’re almost back to pre-pandemic levels,” he said.
Economic managers have slashed further their growth assumption for this year to 4 percent to 5 percent after noting the impact of recent lockdowns, but the 2022 assumption was kept between 7 percent to 9 percent.