Export rebound seen to hasten return to pre-pandemic growth
A stronger economic recovery in the third and fourth quarters due to the expected rebound in exports may hasten the return of the Philippines back to pre-pandemic level by the third quarter of 2022, according to Moody’s Analytics.
Steve Cochrane, chief economist for Asia Pacific at Moody’s Analytics, said the Philippines’ real gross domestic product (GDP) level may exceed its pre-pandemic level in the third quarter of 2022.
“Previously, the new peak was projected to occur in the fourth quarter of 2022. But I now expect stronger growth in the third and fourth quarters this year due to the rollout of vaccines around the world and that exports from the Philippines are beginning to accelerate,” Cochrane said.
The Philippines slipped into recession with a record GDP contraction of 9.5 percent last year, ending 22 years of growth.
“In terms of the quarterly growth rate of real GDP, I expect growth will return to a pre-pandemic rate in the fourth quarter of this year or first quarter of next year,” Cochrane said.
During the Global Economic Outlook webinar, Cochrane said the Philippines, Indonesia and Malaysia continue to struggle in managing the COVID-19 outbreak.
“In terms of instituting strict social distancing, the Philippines was very strict for a long time. It suffered very much from that, but they have eased up on some of those social distance measures there,” he said.
Furthermore, Moody’s Analytics said the Philippines as well as Vietnam, Thailand and Indonesia seem to be struggling in terms of acquiring COVID-19 vaccines.
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Moody’s Group said the Philippines, Indonesia and Thailand have not had a lot of fiscal stimulus.
Moody’s Analytics said the Philippines and India would struggle due to their deep recessions and the uncertain fiscal support of their policymakers.
“The Philippines and India have the deep holes to come out from. Even if 2021 will be a good year, they have deep holes to pull out from. There’s a potential for the Philippines to snap back if it can control COVID,” Cochrane said.