The Philippines is one of emerging markets that would take a big hit from the economic disruption of the COVID-19 pandemic, which would be made even worse by insufficient health care systems and reliance on bigger economies, according to UK think tank Oxford Economics.
“The COVID-19 pandemic will badly hit all emerging market economies,” said Oxford Economics in a report on March 24, “EM coronavirus rankings—bad for all, awful for some.”
“Limitations in health care, fiscal buffers, and economic structure typically make emerging markets more vulnerable to major external shocks,” the think tank said.
Oxford Economics noted that during the 2009 financial crisis, emerging markets “suffered a bigger hit to activity” than advanced economies.
This was because “the structure of their economies and lower buffers typically make them more vulnerable to major external shocks.”
“This time around, emerging markets will also suffer disproportionately,” said Oxford Economics.
“This was first evident in financial markets, as global investors sought safe havens for their capital and withdraw from emerging markets,” it said.
“But worse is to come given the gigantic disruptions to domestic supply and domestic and global demand,” Oxford Economics added.
In a scale of one (lowest risk) to 10, Oxford Economics placed the Philippines at six in terms of overall social and economic vulnerability to COVID-19.
Among the seven Asian countries covered by the report, India was deemed most vulnerable, followed by Vietnam, the Philippines, Malaysia, Thailand, Indonesia, and China.
“Asian emerging markets suffer relatively stretched health care and broadband capacity,” Oxford Economics noted.
Oxford Economics said tourism was “likely to suffer most” among vulnerable sectors. The Philippines, Thailand and Croatia “will be particularly affected as tourism receipts plunge,” it said.
Based on Oxford Economics estimates, tourism contributed 25 percent to the Philippines’ gross domestic product (GDP).
Edited by TSB
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