The Philippine economy is now among the most vulnerable economies in Asia, as the highly transmissible Delta variant of COVID-19 spreads in the country despite longer lockdowns, research arms of debt watchers said.

Moody’s Analytics ranked the Philippines 15th out of 20 countries in Asia Pacific in its relative economic risk ranking, just above Indonesia, Malaysia, Vietnam, Sri Lanka, Thailand, and Malaysia.

“The Philippines and Indonesia will struggle with less effective COVID-19 policies – vaccine shortages and ineffective social distancing measures – that create much uncertainty on the timing of a rebound,” said Steven Cochrane, Moody’s Analytics chief economist.

Cochrane noted that the Philippines’ recovery will be “no straight line,” mainly due to low vaccination rates, high death rates, and the increase in new cases despite stricter movement controls.

The Philippines’ gross domestic product (GDP) grew 11.8% in the second quarter of 2021 on a year-on-year basis.

However, Cochrane emphasized that quarter-on-quarter GDP contracted by 1.3% on a seasonally adjusted basis.

With this decline, the Philippines joins Malaysia, Singapore, and Hong Kong as having the most volatile track for recovery.

Moody’s Analytics also noted that the Philippines, Japan, Vietnam, Malaysia, and Thailand have the most COVID-19 Delta variant cases relative to population size.

On Monday, August 30, the Philippines reported a new record high of 22,366 COVID-19 cases in one day, bringing the country’s total to 1,976,202.

The Department of Health reported a positivity rate of 27.5% out of 65,237 tests in its bulletin on Monday. This means that around one in four people tested turned out positive for the virus.

Moody’s said the least vulnerable countries include Singapore, China, Cambodia, Hong Kong, and Japan due to high vaccination rates as well as successful contact tracing and containment efforts.

“Not only have they aggressively vaccinated their populations, but they have contained recent outbreaks, which has allowed their healthcare systems to treat those who are ill,” Cochrane said.

Fitch Solutions also shared similar observations, leading it to cut the Philippines’ 2021 growth outlook to 4.2% from 5.3%.

Fitch Solutions also noted that Thailand and Malaysia are experiencing more outbreaks due to low vaccination rates.

With stricter lockdowns in place, the Philippine government’s economic managers lowered their GDP growth target to just 4% to 6% for 2021. – Rappler.com