International Monetary Fund (IMF) projected that the Vietnamese would be richer than Filipinos this year, citing the difference in how the two countries fight the COVID-19 pandemic.
IMF said that Vietnam’s per capita gross domestic product would hit $3,497.51 to overtake the Philippines’ $3,372.53 under current prices.
Per capita gross domestic product (GDP) is a metric that breaks down a country’s economic output per person and is calculated by dividing the country’s GDP by its population.
The IMF projections would happen. The income of Filipinos will not catch up with that of the Vietnamese in the next 5 years. The agency said that by 2025, Manila’s $4,805.84 per head would be lagging behind Hanoi’s $5,211.90.
For experts, the two country’s COVID-19 response made a significant impact on the poverty rate. “Vietnam responded very well to the pandemic and was able to keep growing even if at a slower rate. In contrast, the Duterte administration’s poor and still tepid response has caused the worst economic collapse in the country’s history,” Sonny Africa, executive director at IBON Foundation, a think tank.
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Vietnamese will be richer than Pinoys this year – IMF
Meanwhile, acting Socioeconomic Planning Secretary Karl Kendrick Chua has not issued a statement regarding the IMF’s latest findings.
Africa said projections on Vietnamese getting richer than Filipinos are not surprising as the country has been at the “cusp” of doing so for years now.
IMF also sees the Philippine economy shrinking 8.6% year-on-year in 2020, while Vietnam is forecast to grow 1.6% annually.
For Ruben Carlo Asuncion, chief economist at UnionBank of the Philippines, the effective and fast containment of COVID-19 made the difference for Vietnam. Vietnam recently announced lifting a three-week lockdown last week after fighting the second wave of the virus.
“Even before COVID-19, Vietnam, I believe, has been on a higher growth trajectory than the Philippines, and it cannot be denied that Vietnam has done a better job so far in containing the coronavirus compared to the Philippines,” he said in a text message.
Calixto Chikiamco, president of Foundation for Economic Freedom, meanwhile said, “Their exports are 100% of GDP while ours is only about a third. Cheap food enables them to give reasonable wages with high purchasing power, powering growth in their manufacturing sector.”