MANILA - Social aid and assistance to micro, small and medium enterprises will help mitigate the impact of the COVID-19 pandemic and fast-track recovery in the Philippines, according to a World Bank report released Tuesday.
Immediate social protection, effective health management and resuming investments in human capital and infrastructure could also boost recovery in the country, said the World Bank's October 2020 Economic Update for East Asia and the Pacific report "From Containment to Recovery."
“In the short-term, every peso put directly in the hands of poor and vulnerable families through social assistance translates into demand for basic goods and services in local communities, which in turn supports micro and small enterprises and the government’s recovery efforts” said World Bank Country Director for Brunei, Malaysia, Philippines and Thailand Ndiamé Diop.
“At the same time, one cannot overemphasize the importance of improvements in public health management including testing, tracing, isolating, and treatment to effectively control the spread of COVID-19 and secure a definitive recovery," Diop added.
Diop said investing in technical infrastructure to enhance digital delivery of social assistance would ensure that aid directly reaches the poor.
The World Bank is working with the Department of Social Welfare and Development (DSWD) to establish a state-of-the-art digital delivery system, he said.
The National Economic and Development Authority earlier said it would hasten the rollout of the national ID system, which should pave the way for a faster and effective cash aid distribution. Digital cash aid distribution is also likely to curb corruption, Finance Secretary Carlos Dominguez earlier said.
The Philippine economy could contract by 6.9 percent this year before rebounding to 5.3 percent in 2021 and 5.6 percent in 2022, the report said.
The economy had been growing at an average of 6 percent before the pandemic, but restrictions pushed the country into recession after a steep 16.5-percent GDP drop in the second quarter of the year.
World Bank senior economist Rong Qian said the projected economic rebound assumed that the country successfully manages the pandemic and has no major spike in cases that could lead to new lockdowns.
"The assumption is that we will continue the gradual reopening of the economy and COVID is managed and we don’t see another spike that would trigger another reversal in lockdown," Qian said.
The recovery phase is also "slower in the Philippines" than in Indonesia since the country is "much more connected to the world," she said.
Qian said the Philippines relies on tourism, service and trade exports and is much more "exposed to the global demand." The still on-going quarantine restrictions, first enforced 6 months ago, also contribute to slower recovery, she said.
President Rodrigo Duterte on Monday said Metro Manila and other areas would remain under general community quarantine until Oct. 31, a notch higher than the lowest level, the modified GCQ.
The country's economy could shrink 5.5 percent this year before recovering next year, revised government estimates showed.