Surge in new cases, rising inflation bring PH economy in "worrisome state" – Moody's Analytics

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Metro Manila (CNN Philippines, March 26) — Moody's Analytics has raised red flags over the capacity of the Philippine economy to bounce back as COVID-19 cases continue to balloon, coupled with the uptrend in the inflation rate.

In its Asia Pacific Daily Briefing, the research arm of credit ratings agency Moody’s Investors Service said the country is "in a worrisome state."

Moody's Analytics also said its 6.3% growth estimation for the local economy "has significant downside risks at this stage."

RELATED: Continual lockdown, slow vaccination drive threaten PH's recovery - Moody's Analytics

"Elevated inflation, a large output gap, a recent resurgence of COVID-19 infections, and limited vaccine availability are all reasons for concern," it said.

Inflation rose faster in February at 4.7% versus the 4.2% hike in January and 2.6% for the same period last year.

This, as meat products logged the quickest rise in costs outside Metro Manila following the government's decision to impose a price cap in the capital.

RELATED: Inflation hits over 2-year high of 4.7% in February

"The uptick was driven by food shortages, with swine flu a significant contributor — the disease has reportedly wiped out over one-third of the country's pig stocks," Moody’s Analytics said.

It also noted the government's move to put Metro Manila and four other provinces under stricter quarantine control.

The limited availability of COVID-19 vaccines would also place the Philippines "at continued risk of further outbreaks in the near term."

On Friday, the country witnessed record-high COVID-19 cases with 9,838 people who contracted the virus, pushing the total to 702,856.

READ: PH logs new all-time high of nearly 10,000 single-day rise in COVID-19 cases

Reacting to Moody's Analytics' statement, Albay Second District Representative and House Ways and Means Committee chairman Joey Salceda said: "We're in a global crisis. Of course, things are worrisome."

"There are factors here that could be explained by the global context. Certainly, the COVID-19 resurgence is the experience of even the most vaccine-advanced countries," he said in a statement.

Salceda added that food inflation should be blamed primarily on pork supply issues brought by the ASF. Mobility restrictions have also affected the supply, he noted.

He said his committee is already working with the Department of Agriculture to make import procedures safer to prevent any further ASF contamination. "We are also formulating a draft policy to link pork tariffs with public investments in biosafety and livestock insurance."

"Congress, as you know, has already approved a COVID-19 Vaccination Program Act and I am a principal author of that law. We are tightening the noose on smuggling of excised products to ensure that we have adequate funds for our COVID-19 response," he said.

"In short, we are still in a crisis. Things are naturally worrisome. There are things beyond our control, but there are also policy and governance solutions," Salceda added.