Occasionally, various macro and socio-economic factors can combine to create a perfect storm for countries, and we’ve seen plenty of examples of this throughout the ages.
One of the most recent examples has been provided by the Philippines, which has been devastated by rampaging typhoons and the coronavirus pandemic (alongside the social distancing and lockdown measures associated with Covid-19).
We’ll explore these factors below, while asking what steps are being taken to boost economic growth in the region.
Covid-19 and the Typhoons – A Tough Year for the Philippines
Interestingly, the Philippines was one of the ASEAN nations most affected by the coronavirus, with the region having recorded in excess of 462,000 cases and 8,957 fatalities as of December 22nd.
The region’s economy has also been impacted as a result of this, with the Philippine government having recently lowered its outlook for the economy in 2020, forecasting a contraction of between -8.5% and -9.5% before the year is out.
This situation has been compounded by three strong typhoons, which have raged over the course of the last three weeks and killed more than 100 people.
In addition to this tragic loss of life, the Typhoons (particularly Typhoon Vamco and Typhoon Goni) also caused widespread damage to farms and infrastructure, with this estimated to have cost a staggering 25 billion pesos ($518.5 million) to date.
Of course, many provinces north of the capital Manila remain submerged in flood waters, after Typhoon Vamco swept across Luzon last week. This, alongside the devastation caused by the two previous typhoons, has also prompted a global relief effort while reinforcing the fact that launching an economic recovery will take a considerable period of time.
Cause and Recovery – What Next for the Philippines?
Of course, the Philippines is renowned for its typhoon season, although some have argued that this years’ iteration has been made considerably worse by the impact of climate change.
When Typhoon Goni barrelled across the region, for example, it brought winds of 140mph, along with catastrophic downpours. Not only this, but the frequency of these recent typhoons has proved to be a cause for concern, and there remains a pressing need to tackle climate change as part of a coordinated global effort.
In terms of the near-term recovery, President Rodrigo Duterte has been compelled to delicate a state of calamity in the island of Luzon, which is home to a total of 53 million people.
Such a state has been previously declared as a result of the Covid-19 pandemic, creating a scenario where funds will be released quicker to those in need and the granting of interest-free loans will provide a much-needed economic stimulus.
At the same time, the prices of all basic commodities will be capped and frozen, most likely for an indefinite period of time.
From a commercial perspective, the Philippines is also set to benefit from an additional investment from the technology brand Dyson, which will commit a total of £2.75 billion ($3.67 billion) to new innovations over the next five years.
This will enable the company to increase its product range, while enabling it to target new markets in Singapore, the UK and the Philippines (creating additional jobs and opportunities within these regions).
Interestingly, the Philippine peso is also poised to notch a third year of gains in 2021, as a result of the sluggish economic performance and its direct impact on imports (which will subsequently cause remittances to rebound).
These measures will help to sustain the economy during times of such tumult, while laying the foundation for a subsequent recovery in 2021.