Connect with us

Hi, what are you looking for?

News

Philippines may face ‘deep scarring’ from pandemic — Moody’s

Moody’s Investors Service lowered its Philippine growth forecast this year to 5.8% from the 7% it gave in January. — Photo by Michael Varcas, The Philippine Star

The Philippines may face “deep scarring” or long-lasting economic losses due to the prolonged pandemic, Moody’s Investors Service said on Friday.

“Many have been challenged to contain the pandemic, such as Peru, the Philippines and India, heightening uncertainties around the effective reopening of their economies amid new waves of the virus since the start of the year,” it said in a note.

Coronavirus disease 2019 (COVID-19) infections on Friday rose by 6,845 to bring the active cases to 55,069, the Health department reported.

In an attempt to curb the spread of the more transmissible Delta variant, President Rodrigo R. Duterte placed the National Capital Region under a general community quarantine (GCQ) with heightened restrictions until July 31.

In a separate note also released Friday, Moody’s warned that emerging markets with low vaccination rates are the most vulnerable given the possibility of renewed infection surges.

Data from the Johns Hopkins University showed that vaccine doses administered in the Philippines reached 15.616 million, although only 5.031 million have received two jabs. This means only 4.65% of the population has been fully vaccinated against COVID-19 so far.

The government eyes to vaccinate as many as 70 million Filipinos by end-November, focusing on risky areas where infections are relatively higher.

Moody’s said that the degree of scarring and the recovery will be dependent on a country’s economic structure and the adaptability of its labor and goods market. It stressed the quality of policy response and vaccination pace will also be crucial.

“Economic scarring from the COVID-19 crisis will compound underlying challenges related to fiscal consolidation and the reversal of debt accumulation. It will lower income levels, exacerbate inequality, and increase poverty,” the ratings agency said.

“Well-targeted fiscal stimulus that supports viable companies and employment is more likely to allow recipient economies to emerge from the pandemic without significant economic scarring,” it added.

Government officials on Monday kept its budget ceiling for 2021 at 9.3% of the gross domestic product (GDP, but lowered its threshold to 5.9% (from 6.4%) in 2023 and 4.9% (from 5.4%) for the next three years, reflecting their stance to keep fiscal prudence during the crisis.

Moody’s on Wednesday lowered its Philippine growth forecast this year to 5.8% from the 7% it gave in January. The latest estimate is also lower than the 6-7% target growth by the government.

Most economies will be hit by scarring in different degrees, the ratings agency said. This will be reflected through output loss which will likely be regained beyond 2023.

Other countries that are also expected to have “deep scarring” include tourism-driven economies such as Bahamas, Barbados, Belize, Mauritius, and Montenegro and lower-income countries like Bangladesh, Uganda, and Tanzania, among others.

Meanwhile, it noted that Asian economies such as China, Singapore, and Korea where the initial response to the virus has been relatively effective and have new strategies geared towards adjusting to a post-pandemic world face limited risks of long-term scarring.

Moody’s affirmed its “Baa2” with a “stable” outlook for the Philippines in July last year. In March this year, it warned that the infection spike is “credit negative” to the country’s rating and may hinder economic recovery. — Luz Wendy T. Noble

Your information is secure and your privacy is protected. By opting in you agree to receive emails from us. Remember that you can opt-out any time, we hate spam too!

Latest

News

Official White House Photo by Adam Schultz WASHINGTON — A first in-person meeting of the leaders of the Quad group of countries — the...

News

PIXABAY UNITED NATIONS — Faced with what they see as an existential threat, leaders from low-lying and island nations implored rich countries at the...

News

StackLeague is now gathering over 6,000 developers, software engineers and programmers all across the Philippines who share the same interest in competing while also...

News

Insights to Inspire aims to spark ideas that empower businesses to pursue bigger goals through data and information. Read our insights on current issues...

News

By Luz Wendy T. Noble, Reporter THE PHILIPPINE central bank kept the benchmark policy rate at a record low on Thursday, as it tries...

News

BW FILE PHOTO By Beatrice M. Laforga, Reporter THE NATIONAL Government’s budget deficit tripled to P120.9 billion in August from a year earlier after...

You May Also Like

When people envision technology overtaking society, many think of The Terminator and bulletproof robots. Or Big Brother in George Orwell’s Nineteen Eighty-Four, a symbol...

Financial Advisors

Stock Markets9 hours ago (Jul 02, 2020 04:45AM ET) (C) Reuters. ROME (Reuters) – World food prices rose in June to post their first...

Economy

SAN FRANCISCO — The spread of the coronavirus has meant feast or famine for technology start-ups. While many are cutting staff and slashing costs...

Economy

OAKLAND, Calif. — Jack Dorsey has won plaudits for his corporate activism during the coronavirus crisis, taking on President Trump in his role as...

Disclaimer: Respect Investment.com, its managers, its employees, and assigns (collectively "The Company") do not make any guarantee or warranty about what is advertised above. Information provided by this website is for research purposes only and should not be considered as personalized financial advice. The Company is not affiliated with, nor does it receive compensation from, any specific security. The Company is not registered or licensed by any governing body in any jurisdiction to give investing advice or provide investment recommendation. Any investments recommended here should be taken into consideration only after consulting with your investment advisor and after reviewing the prospectus or financial statements of the company.

Copyright © 2021 Respect Investment. All Rights Reserved.

Your information is secure and your privacy is protected. By opting in you agree to receive emails from us. Remember that you can opt-out any time, we hate spam too!