Time to write off 2021. One can only hope that it’s not worse than 2020. The major mistake was reopening the economy without a unified contact-tracing system in place and local government units (LGUs) being remiss in enforcing minimum health protocols. Add to this the arrival of the new and more contagious variants and this is the result.
Vaccine supply continues to be scarce. Western countries will only donate excess vaccine supply after they’ve achieved herd immunity. The exception may be for India which poses the most risk if it’s double-mutant variant spreads globally. Interestingly, Security Bank chief economist Robert Dan Roces seems optimistic…
Roces expects growth to improve gradually in the quarters ahead, banking on a wider vaccination rollout and higher infrastructure spending in the second half.
Roces said elections spending should also play some part, although the pandemic may present a shift in how this type of spending is conducted.
“The reimposed lockdowns in the second quarter may complicate the overall growth picture, and the Philippines is likely to miss the 6.5 to 7.5 percent GDP growth target this year after lockdowns. The BSP is more likely to keep monetary stimulus in place for the year,” Roces said.
The economy could’ve done better if only government and private sector cooperated on digitization. As it is, both have been remiss which has resulted in the continuing recession. Inflation reared its ugly head again further dampening consumer sentiment. The political structure doesn’t afford the government the agility it needs to respond to the dynamics of the pandemic.
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It doesn’t help that this year is the run-up to an election cycle. It remains to be seen if election spending will be on the same level as before given campaign sorties are difficult to organize with the ban on large crowds. The economy will have an impact on voter preference. It may just well happen that the electorate will focus more on issues than popularity this time.
We are in a bind because the Duterte administration is preparing to step down. Continuity is also another important consideration for voters. We need a leader who is capable of leading the country out of the pandemic doom and gloom scenario being painted by the opposition.
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