The economic recovery in the Philippines will be much slower than most of its regional neighbours, as the coronavirus pandemic crisis in the country remains uncontrolled, according to the World Bank.

According to Noelan Arbis, economist at HSBC, the slow economic recovery is due to the slow recovery of services sector which is a major contributor to a country’s economic growth. He also noted that the Philippines needs more “fiscal stimulus” to improve mobility in order to have vigorous recovery.

"The pandemic has hit the services sector far worse than other sectors of the economy like manufacturing. Like China, it was the manufacturing sector that recovered first and foremost, then it was the consumers and services sector that recovered later on," Arbis said.

The economist said that the country's fiscal stimulus packages which are equal to 3 to 4 percent of the gross domestic product (GDP), should be raised as high as the neighboring countries.

"Unfortunately, the Philippines is a service-oriented economy. By that nature, lockdown and movement restrictions remain in place, the services sector is likely to be one of the last to recover particularly in some key industries like travel, leisure, and restaurants," he said.

Arbis also noted that the country's GDP is expected to grow by 6.5 percent in 2021 before growing again by 6.5 percent next year, assuming that no major spikes in coronavirus cases lead to further lockdowns.

Meanwhile, World Bank senior economist Rong Qian claimed that the Philippines will only see economic growth going back to pre-pandemic levels by the 4th quarter of 2021, saying this is indeed slower than most of its regional peers.

Modernizing Agriculture is essential to faster recovery and poverty reduction

In a report released by World Bank, it said that transforming Philippine agriculture into a dynamic, high-growth sector is essential for the country to speed up economic recovery, poverty reduction and inclusive growth.

The report says that modernizing the country’s farming and food systems is more important during the COVID-19 pandemic to ensure “strong food value chains, affordable and nutritious food, and a vibrant rural economy.”

"Modernizing the country’s agricultural sector is a very important agenda for the Philippines. With the exception of a few small natural resource-rich countries, no country has successfully transitioned from middle to high-income status without having achieved an effective transformation of their agri-food systems.” said Ndiame Diop, World Bank Country Director Brunei, Malaysia, Thailand, and the Philippines.

“Transforming agriculture and food systems is always challenging. But the country’s new vision for agriculture, it’s current thrust for diversification and use of modern technologies, and its effective management of food supply during this pandemic clearly indicate that the country is well-equipped to overcome the challenge,” he added

According to Rappler’s report, developing East Asia and the Pacific is projected to shrink by 0.9%, as most countries projected negative growth for the entire 2020.

Thailand was able to successfully contain the virus, but will post a contraction of 8.3%. This is due to its high exposure to trade and tourism.

While Fiji’s economy is expected to sink by 21.7%, as it relies heavily on tourism, too.

Only Vietnam and China are expected to post growth in 2020, as both were able to flatten the infection curve.