World Bank sees strong Philippine economic rebound, COVID-19 resurgence a risk

MANILA: The World Bank expects Philippine economic growth to bounce back in the next two years after a worse-than-projected decline in output in 2020, as the country gradually eases coronavirus curbs to allow for more business activity.

The Southeast Asian economy is forecast to grow 5.9% next year, the World Bank told a media briefing, stronger that its earlier forecast of 5.3%, and gain more momentum in 2022, with growth projected at 6.0%.

That should lead to a reduction in poverty, which is estimated to have worsened this year as the pandemic may have pushed 2.7 million more Filipinos into poverty, based on the World Bank's poverty yardstick of living under $3.20 a day.

The Philippines, which before the pandemic was one of Asia's fastest growing economies, is expected to post a deeper-than-expected contraction of 8.1% this year, the World Bank said, due to the lockdowns and damage caused by recent typhoons.

While the World Bank's revised forecast was worse than its previous estimate of a decline of 6.9%, it was slightly better than the government's forecast of an 8.5%-9.5% GDP drop this year.

The World Bank said its forecasts for growth in 2021 were not without risks. "The possible resurgence of COVID-19 is the most significant downside risk to the outlook," said Rong Qian, a senior World Bank economist.

With more than 440,000 infections and 8,500 deaths, the Philippines has the second-highest coronavirus caseload in Southeast Asia. The country aims to start vaccinating millions of people against COVID-19 next year.

"Our baseline forecasts do not assume that a vaccine will be rolled out very soon. If it is rolled out next year this will constitute upside risk," Qian said.