July 13, 2021
The outlook for the Philippines is “looking up, for now” due to slowing COVID-19 infections that augured well for economic recovery and the reopening of more businesses under minimum health standards, according to Moody’s Analytics. However, the think tank cautioned the government against reopening too quickly amid the lingering threat from more contagious virus variants, which inflicted stringent lockdowns in neighboring countries.
The Philippines is expected to focus on the domestic market to keep its tourism industry afloat for now while the country is still working to attain herd immunity from COVID-19. Tourism Undersecretary Benito Bengzon Jr. said focusing on domestic tourism was a deliberate strategy for the Philippines, which has so far inoculated about 10 percent of its total population. He noted that pre-pandemic, there were about 110 million annual domestic trips that generated revenues five times bigger than revenues from in-bound tourists.
The National Economic and Development Authority (NEDA) stressed the need to hasten the rollout of vaccines, particularly in areas with high infection rates, amid risks from fast-spreading coronavirus disease 2019 (COVID-19) variants. Mr. Chua said the threat of the new COVID-19 variants can be dealt with if the government improves health protocols and only impose localized lockdowns on areas with high infections.
Notwithstanding the unstable supply of Covid-19 vaccines, the Department of Health (DOH) on Monday expressed optimism that the target of herd immunity by November 2021 would still be achieved. As of July 11, 2021, a total of 13,196,282 doses have already been administered. Of these, 9,669,940 have received their first doses, while 3,526,342 have already completed the required 2 doses.
Foreign direct investments (FDI) posted a 114.4-percent growth in April this year to hit $679 million during the month, up from the $317 million in the same month last year. The strong April FDI performance pushed the total FDI numbers of the country to $3.06 billion in the first four months of the year, growing by 56.3 percent from the $1.96 billion in January to April in 2020.
75 percent of Filipinos believe that everyone should be vaccinated against the coronavirus disease (COVID-19), but only 43 percent are actually willing to be inoculated, the June 7 to 16 Ulat sa Bayan survey of Pulse Asia showed. The survey, which involved 2,400 adult respondents with a ± 2 percent margin of error, also showed that 96 percent of Filipinos are concerned that they or a member of their family might contract COVID-19, up from 94 percent in February this year, while two percent cannot say if they are worried or not.
The Bangko Sentral ng Pilipinas (BSP) on Monday reported the 114.4-percent year-on-year jump of net FDI inflows to USD679 million last April from USD317 million in the same period last year. In a report, Rizal Commercial Banking Corporation (RCBC) chief economist Michael Ricafort said lower interest rates and lower cost of some inputs like real estate property and leases are plus factors that enticed higher FDIs. Ricafort said positive credit rating actions on the Philippines, which even got its first-ever A-level credit rating, A-, from the Japan Credit Rating Agency (JCR) in June 2020, also boosted investors' sentiment on the domestic economy.
The Department of Trade and Industry (DTI) expressed confidence the number of closed establishments could further go down from 10 percent as of June as long as the general community quarantine (GCQ) status in most areas is maintained. Meanwhile, Karl Kendrick Chua, National Economic and Development Authority chief, said the threat of the Delta variant can be properly managed without the need to place the country under GCQ or higher levels of lockdown. He added that the government acknowledges the Delta variant’s threat to the Philippines, and that it can be addressed through border controls and enforcement of health standards.
In a statement released on Monday, debt watcher Fitch Ratings explained that the change in their outlook for the country's economy was due to the increasing credit profile risks brought by the COVID-19 pandemic and its aftermath on policy-making and economic and fiscal outputs. The international debt watcher noted the decrease in the country's overall investment to 27% in 2020 and high unemployment rate of 7.7%, all due to the COVID-19 pandemic, are factors for the downgrading of their economic outlook.
Metro Manila is on course to fully vaccinate half of its residents by September, an official said. Metropolitan Manila Development Authority Chairman Benhur Abalos said a conservative estimate of 107,000 COVID-19 shots are being administered daily in the capital region, so 50% of the 14.6 million total population could have completed their two doses in the next two months.
The country is set to receive next week its first shipment of single-dose COVID-19 vaccines from United States-based firm Johnson & Johnson, a health official said. Health Undersecretary Myrna Cabotaje said 3.2 million Janssen doses donated by the US government through the COVAX program co-led by the World Health Organization will arrive on July 19.
Information and Communications Undersecretary Manny Caintic said that the digital COVID-19 vaccination certificates may be issued in early August if local governments are able to submit the names of immunized people so data may be uploaded on the vaccine information management system. The DICT's plan is to create a mobile application that will contain a digital version of the vaccination card and a QR code that can be scanned if people need to show proof of their COVID-19 immunization to enter an area, Health Undersecretary Maria Vergeire said.
The latest preliminary Philippine Statistics Authority (PSA) data showed that merchandise exports and imports combined reversed the 35.2-percent drop to $10.4 billion a year ago. The growth in external trade in May was slower than the 114.5-percent year-on-year jump in April. Two-way foreign trade figures a year ago fell during the most stringent enhanced community quarantine (ECQ) imposed from mid-March to May 2020, which shut down 75 percent of the economy in a bid to contain COVID-19’s spread.
The state planning agency National Economic and Development Authority (Neda) expects a steady easing of food prices up to the end of this year given enough supply of rice, chicken, fish and, boosted by the influx of pork imports, meat. Following above-target inflation at the start of the year mainly due to expensive food —especially pork, no thanks to supply constraints caused by the African swine fever (ASF) crisis, Neda said in its latest inflation report that “most food commodities are expected to remain sufficient in 2021.”
The Philippines should improve its institutional capacity to be able to ramp up spending during a crisis, the International Monetary Fund (IMF) said. Data from the Department of Budget and Management showed agencies were only able to spend P141.45 billion from Bayanihan II as of June 25 or five days before the law’s expiration, leaving P63.55 billion unspent. With the expiry of the second stimulus package, IMF’s Mr. Yang said the Philippines still has fiscal space that can be utilized to support the economy despite the increase in public debt during the crisis.
The chairman of the Senate Finance Committee on Sunday gave assurances that key provisions of the Bayanihan 2 for the pandemic response can continue to be implemented despite the June 30 expiry of the law. In particular, Senator Juan Edgardo Angara cited those items providing crucial support for medical frontliners; easing “permitting requirements” for vital infrastructure like telco towers; benefits for agrarian reform clients; and support for pandemic-impacted transportation sector.
Department of Trade and Industry (DTI) Secretary Ramon Lopez has welcomed the robust exports performance for May 2021, saying the country’s outbound trade will continue its upward trend. The Philippine Statistics Authority (PSA) reported that merchandise export revenues in May rose by 29.8 percent to USD5.89 billion from USD4.54 billion during the same period last year. He said that the vaccination rollout here as well as allowing 100-percent capacity of export-oriented enterprises even during the modified enhanced community quarantine (MECQ) in NCR Plus allowed the export sector to continue its robust performance for the month of May.
In its latest monitoring, OCTA Research said the fatality rate dropped to 0.78 percent from June to July 6, down from the 1.06 percent recorded from January to March 31, 2021. OCTA Research said the drop may be attributed to the improvements in treatment and management of Covid-19, including in efforts of health care workers as well as the national and local government in scaling up hospital capacity and equipment.
The Anti-Red Tape Authority (ARTA) is pushing for online sharing of data on birth, death, and marriage, among others, with government agencies. In a statement, ARTA said the agency has written the Philippine Statistics Authority (PSA) to make this initiative possible in the near future. Belgica said the integration of these data among government agencies will allow faster and easier transactions within public offices but also for the general public.
Some P33 billion investments are on hold as they await the final decision on their eligibility for incentives, particularly value-added tax (VAT) exemption, according to the Philippine Economic Zone Authority (PEZA). PEZA management said these include a P16-billion expansion of Amkor Technology Philippines which provides semiconductor assembly and test services; the P11-billion integrated steel project of Chinese firm Panhua Groups as well as the P6-billion investment of British technology firm Dyson. A Swiss firm is also planning a major investment in the country, according to PEZA.
Manufacturing sustained its expansion in June when the country’s vaccination rollout picked up, according to stock broker SB Equities. In the Philippines, the country’s manufacturing production indices have remained in positive growth territory, SB Equities said, citing the May value of production Index (VaPI) and volume of production I\index (VoPI) which rose 5.1 points and 4.3 points month-on-month. “We ascribed the uptick for the month to improvements in capacity utilization rate, which rose 2.1 point at 66.1 percent, a 15-month high,” SB Equities said.