written by Kristine Doringo
MANILA, Philippines — According to Malaysian financial giant Maybank, the Philippines is on track to become the fastest growing economy in Southeast Asia next year as it gradually recovers from the pandemic-induced recession.
Chua Hak Bin, regional co-head of macro research at Maybank Kim Eng, stated during the bank's virtual Year-end Market Forum and Anniversary Celebration that the Philippines' GDP will likely expand by 7% in 2022.
This would be the fastest among Association of Southeast Asian Nations (ASEAN) member countries, with Vietnam coming in second at 6.7 percent, Malaysia at 6%, Indonesia at 5.4 percent, Thailand at 4%, and Singapore at 3.5 percent. The region as a whole is expected to grow by 5.3 percent next year.
Chua forecasts 5.5 percent GDP growth in the Philippines this year, slower than Singapore's 6.8 percent but faster than Indonesia's 3.9 percent, Malaysia's 3.8 percent, Thailand's 1.6 percent, and Vietnam's one percent..
As per Chua, Maybank forecasts world GDP growth of 4.5 percent in 2022, down from 6% in 2021, but ASEAN growth would increase to 5.3 percent, up from 3.8 percent.
As a result of the pandemic's impact, the global economy entered a recession last year, with a 3.2 percent drop in GDP, while ASEAN's economy shrank by four percent.
"For the first time since 1990, ASEAN's GDP growth will likely be faster than China's in 2022, due to cyclical drivers such as economic reopening with rising vaccination rates, and in subsequent years due to structural drivers such as demographics, leverage, and shifting manufacturing supply chains," Chua said.
Maybank's GDP growth forecast for the Philippines is likewise faster than the four to five percent target established by the Development Budget Coordination Committee (DBCC) for this year, and well within the seven to nine percent range set for next year.
After emerging from recession with back-to-back GDP expansions of 12 percent in the second quarter and 7.1 percent in the third quarter, the country's GDP growth averaged 4.9 percent from January to September.
Chua believes the Philippines should take advantage of its demographic dividends as the working-age population is expected to peak in 2050, while many countries of Asia are aging.
According to the economist, the Philippines' rate of COVID-19 vaccination is lagging behind that of other countries such as Thailand and Vietnam, where vaccine rollout is accelerating.
"By May 2022, the Philippines is expected to have a vaccination rate of 70%," Chua said.
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