MANILA - The Philippines is lagging behind its neighbors in terms of returning to pre-pandemic economic growth rates, according to a preliminary study by the Asian Development Bank released Thursday.
The ADB said its COVID-19 Country Assessment or COCOA Report due this March aims to measure how different nations in Southeast Asia are recovering from the pandemic.
However, preliminary results show that while the Philippines is a high growth country in the region, it also has one of the highest deviations from pre-pandemic growth rates.
ADB’s latest growth outlook has the Philippines growing 6 percent this year, faster than China’s forecast of 5.3 percent, and the ASEAN-5 forecast of 5 percent. This growth rate is second only to Vietnam’s 6.5 percent.
However, the Philippines’ deviation from prepandemic trends is -16.4 percent, which was the worst in the group.
Furthermore, the ADB says Philippine GDP growth could slow to as low as 5.6 percent this year, if COVID-19 problems persist.
One of the key concerns of ADB with the Philippines is the long-term effects of the pandemic on employment. ADB noted that Philippine unemployment has remained above the long-term trend, and many workers have been forced into the informal sector where there are no social safety nets such as insurance.
Steven Schipani, ADB’s tourism lead in the Southeast Asia Department, said tourism can play a key role in reversing the ill effects of the pandemic on employment.
“When economies do open, tourism is going to be even more competitive than it ever was. The whole world is going to be competing for tourists who will be travelling. We will always need good people in the tourism sector.”
Tourism is labor intensive, and it offers individuals the opportunity to sharpen soft skills needed to succeed in all industries, such as team work, hospitality, and quick problem solving, Schipani added
ADB also noted that the sharp increase in reliance on technology will worsen the skills mismatch, particularly for individuals who have been unemployed for longer.
“The hardest hit were those dependent on physical contact including accommodation, transportation, and food services. This is expected to increase the skills mismatch, because workers do not transition easily between sectors,” said Dulce Zara, Senior Regional Cooperation Officer for ADB's Southeast Asia Department.
The Bank recommends setting up enterprise-led training reforms to help the workforce gain the skills needed to stay relevant, and employed. This includes industry-led apprenticeship programs which have been piloted in some programs such as the K-to-12 initiative of the Department of Education.
Other recommendations include unemployment insurance, to help the jobless receive some form of income stability during unanticipated layoffs, and support for MSMEs, climate change initiatives or green jobs, and infrastructure.
While these economic scarring concerns are being addressed, the ADB said it is paramount the region gets COVID-19 under control, as this is still the biggest threat to the recovery.
“The spread of omicron reminds us the economy remains volatile and highly susceptible to the pandemic,” said Ramesh Subramaniam, Director General of the ADB’s Southeast Asia Department.
The Philippines is set to release its preliminary fourth quarter growth figures on Jan. 27.