MANILA, Philippines — With the mass COVID vaccination program in full swing and allowing for greater economic reopening, the Asian Development Bank (AfDB) has become more optimistic about the Philippines’ recovery and has raised its forecast of growth for 2021 and 2022 for its host country.

Moody’s Analytics, however, remained concerned about the Philippines’ relatively low immunization rate compared to most of its neighbors, and warned of the risks of reverting to strict quarantine measures if more contagious strains like Omicron do. propagated.

The ADB’s Asian Development Outlook Supplement (ADO) report for December released on Tuesday (December 14) showed a revised gross domestic product (GDP) growth projection for 2021 to 5.1 percent – as of – above the government’s 4-5% target – up from 4.5% in September. .

The economy grew an average of 4.9% in the first nine months of 2021, following a surprise 7.1% year-over-year increase in economic output in the third quarter.

“Household consumption and investment were the main drivers of growth from January to September,” AfDB said.

“Private investment has rebounded as growth in public construction accelerated in line with the country’s ‘Build, Build, Build’ infrastructure program. Exports increased but were overtaken by imports, with capital goods being a key contributor, ”AfDB said.

“On the supply side, industry and services both contributed to growth in the first three quarters, although agriculture contracted with the fall in pork production,” ADB added. .

“Consumer and business confidence improved steadily in the fourth quarter of 2021 thanks to the acceleration of the government’s vaccination program, a sharp drop in new cases of COVID-19 and the continued reopening of the economy. Growth forecasts are therefore significantly raised, ”he said.

For 2022, the AfDB expects the Philippines’ GDP to grow by 6%, up from its previous estimate of 5.5%. However, the AfDB forecast was below the government’s target of 7-9%.

“The Philippine economy has shown impressive resilience,” said Kelly Bird, Country Director, AfDB Philippines.

“The growth momentum has clearly picked up thanks to the government’s vigorous campaign to immunize Filipinos against the COVID-19 virus,” Bird said in a statement.

“Public spending on infrastructure and continuing to immunize the population will help the country further accelerate its recovery in 2022,” said Bird.

“The AfDB has supported the government’s ‘Build, Build, Build’ infrastructure development program, which aims to stimulate investment in roads, bridges and railways to fuel faster growth, particularly in areas in need. outside of the capital Metro Manila, ”Bird said.

The AfDB noted that it is currently financing expensive infrastructure projects like the improvement of the Angat water transmission, the EDSA greenways and the Malolos-Clark railway. “The bank is preparing a loan of $ 175 million to help the government build climate and disaster resistant bridges to improve road traffic in Metro Manila,” he added.

The AfDB also funded vaccine purchases from the Philippines, including the last $ 250 million loan it approved to purchase booster and pediatric vaccines. Last March, the AfDB also provided a loan of $ 400 million to increase the supply of COVID vaccines.

Multilateral lenders, like the AfDB, pay vaccine suppliers directly to ensure transparency, as the money no longer goes through the Philippine government.

But Moody’s Analytics Senior Economist for Asia-Pacific Katrina Ell said in a separate report Tuesday that “the economic recovery is largely on track and immunization coverage has increased significantly in most of the country. region, but there are exceptions “.

“Indonesia and the Philippines are distinguished by their low immunization coverage, which increases their vulnerability to another wave of infection that requires the reintroduction of movement controls,” Ell said.

Moody’s Analytics data showed that about 28% of the Filipino population was already fully vaccinated as of December 7. An additional 9% had received at least one dose of COVID vaccines.

Separate data from the AfDB showed that among the 11 countries in Southeast Asia, the Philippines ranked ninth in immunization rate, only better than Timor-Leste and Myanmar.

BST

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