Palace to disprove forecast PH will be last to recover in APAC

MANILA – Malacañang on Thursday said it will disprove a forecast that the Philippines is likely to be the last country in Asia-Pacific (APAC) to fully recover from recession which resulted from the coronavirus disease 2019 (Covid-19) pandemic.

In a Palace press briefing, Presidential Spokesperson Harry Roque said the government will find a way to disprove Moody’s Analytics forecast.

“Huwag kayong mag-alala (Don’t worry), we will disprove that forecast wrong [sic]. At eto po ang dahilan kung bakit po nagbubukas ng ekonomiya at palaging sinasabi sa ating mga kababayan, pag-ingatan ang buhay ng tayo’y makapag hanap-buhay (This is the reason why we are reopening the economy and as we always say to our citizens, take care of your health so that we can earn a living),” he said.

In his report, Moody’s Analytics chief economist for APAC Steven Cochrane said the Philippines and India are expected to “struggle” due to deep recessions and uncertain fiscal support of their policymakers.

He expects the Philippines fully recovering by the fourth quarter of next year and India in the first quarter of next year.

Cochrane also said the Philippines and India “are the least committed to fiscal stimulus despite being the hardest hit economies by the pandemic and the lengthy and strict quarantine policies.

He said the Philippines also lags in the procurement process while major countries in the region have already secured Covid-19 vaccines from manufacturers.

Citing Finance Secretary Carlos Dominguez III, Roque emphasized the importance of keeping a “conservative” borrowing program and maintaining a very good credit rating.

“In-explain na po ‘yan ni Sec. Sonny Dominguez kaya ayaw natin mangutang ng todo-todo kasi pag tayo’y nangutang ng todo-todo, maapektuhan din yung ating credit rating, tataas din yung mga interest na babayaran natin at hindi nga tayo sigurado kung kalian pa tatagal itong krisis na ito na dulot ng Covid-19 (Secretary Sonny Dominguez already explained that we do not want to keep on borrowing because if we do that, our credit rating will also be affected, the interest we will pay will also increase and we are not sure until when the Covid-19 crisis will last),” he said.

Roque, however, said government would still be open to change its borrowing strategy if necessary.

Despite calls for a greater Covid-19 stimulus, Roque emphasized the need to be “prudent” in spending so as not to fall into a debt trap.

“I think mas prudent po ang ginawang approach ni Sec. Dominguez na hinay-hinay ang pangungutang, hinay-hinay ang pagagastos kasi kita niyo ‘yan o akalain ba natin na ang buong mundo’y made-delay nga dito sa pag-implement ng mga bakuna (I think the approach of Secretary Dominguez of being conservative in borrowing and careful in spending is more prudent because who knew that there would be delays in the rollout of a vaccination campaign),” he said.

Moody’s Analytics sees the Philippine economy starting to recover with a GDP growth of 4.5 percent this year and 6.2 percent in 2022 after contracting by about 9.9 percent in 2020.

The Philippines acquired the biggest GDP contraction in Asia-Pacific last year followed by India with 8.8 percent, Thailand with 6.1 percent, Singapore with 6 percent, Hong Kong with 5.9 percent, Japan with 5.3 percent, New Zealand with 5 percent, Malaysia with 4.6 percent, Australia with 2.5 percent, Indonesia with 2.3 percent, and South Korea with 1 percent.