NextGen Day

According to experts, the government’s increased vaccination campaign against coronavirus disease 2019 (Covid-19) guarantees economic recovery, and granular lockdowns may minimize the effect of the pandemic.

In response to questions from the Philippine News Agency, Rizal Commercial Banking Corporation (RCBC) chief economist Michael Ricafort stated that granular lockdowns, which have been trialed in the National Capital Region (NCR) since September, “would be a de facto measure to further reopen the economy or, at the very least, reduce the drag on the economy.”

He said that NCR is continuing to progress toward population protection, with almost 80% of the adult population receiving Covid-19 vaccinations.

According to Ricafort, who cited official statistics, more than 50 million Filipinos have gotten vaccines against the virus, with over 23 million already completely immunized.

“Increased immunization against Covid-19 would aid the country in progressively winning the battle against the invisible enemy, Covid-19.” Full immunization significantly lowers the likelihood of Covid-19 infections, severe cases/hospitalization, and fatalities, lowering the strain on the healthcare system and, therefore, the danger of lockdowns in the future,” he said.

According to Ricafort, the ongoing vaccination campaign and reopening of the economy “bode well for the country’s economic recovery prospects in the next quarters/years, although gradually, in light of the need to significantly decrease new Covid-19 cases despite dangers associated with the unvaccinated.”

“The country’s economy might return to pre-Covid levels as early as the later half of 2022 or by 2023,” he said, “but the recovery of other businesses/industries, particularly those hard-hit by the epidemic last year, would likely take much longer.”

The domestic economy, as measured by GDP, had its first increase in the second quarter of this year, growing 11.8 percent, reversing a five-quarter decline that began in the first quarter of last year.

The International Monetary Fund (IMF) reduced the Philippines’ GDP estimate for this year from 5.4 percent to 3.2 percent, noting the effect of quarantine measures to combat an increase in Covid-19 infections caused by the Delta strain.

This growth estimate is lower than the government’s 4 percent to 5% growth forecast for this year, which has already been cut down twice due to the effect of recent economic events and the pandemic.

According to Nicholas Mapa, senior economist at ING Bank Manila, the latest reduction in the IMF’s 2021 growth estimate for the nation “reflects the perception that economic momentum has slowed significantly since the first reopening of the economy last year.”

According to Mapa, the year-on-year growth increase from April to June this year is due to a base effect, alluding to the -17 percent economic decline in the same time last year.

He highlighted gains over last year, but the nation may have to settle for a 3.7 percent full-year growth this year, which marks just a small comeback when contrasted to the -9.6 percent 2020 GDP.

Since 2020, the government has imposed three enhanced community quarantine (ECQ) levels in the NCR, the most stringent of which was last year.

The two two-week ECQs this year, one in late March and the other in August, are not anticipated to have the same detrimental effect on the economy as they did in 2020 since more individuals were permitted to work.

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