THE Philippines may need to supplement its initial crisis spending plans, which are currently the equivalent to as much as 6% of gross domestic product (GDP), but the government retains adequate fiscal space to escalate its stimulus efforts if needed, analysts said.

Alex Holmes, an emerging-markets economist with Capital Economics, said the Philippines has “plenty of space providing more fiscal support” in its efforts to contain the pandemic. He estimates the country’s debt stock to increase 10 percentage points to still-manageable levels.

Mr. Holmes said the economy will need “more fiscal support” to cushion the fallout from the pandemic, with GDP expected to contract 4% this year.

“The government has set aside about 5% to 6% of GDP for health care and economic efforts. Given that debt dynamics in the Philippines do not appear too worrying, there is plenty of space for providing more fiscal support. And we think the economy will need it. GDP is set to contract by around 4% this year,” he said in an e-mail.

The Economist recently ranked the Philippines as the sixth-strongest among 66 emerging economies in terms of financial strength.

The Economist evaluated the emerging markets across four “potential sources of peril:” public debt, public and private foreign debt, cost of borrowing and reserve cover.

The Philippines’ 2019 debt-to-GDP ratio was revised down to 39.6% using 2018 as the base year, after the indicator was initially reckoned at 41.5%. The government’s economic managers set a 46.7% debt-to-GDP target this year.

Meanwhile, Fitch Solutions Country Risk and Industry Research, estimated that the government’s fiscal policy response at about 2% of GDP, noting that the allotted funds “have been relatively small.”

Nicholas Antonio T. Mapa, senior economist at ING Bank NV-Manila Branch said the government will have to roll out fiscal packages “commensurate to the expected economic loss from lockdown and the projected changes to the economy in a world of social distancing.”

Mr. Mapa said among the fiscal packages rolled out by the government for COVID-19 damage control amount to around P400 billion, which includes the cash aid program for poor families, support for the health care sector and the wage subsidy program.

The National Economic and Development Authority in March estimated that the economy could lose P428.7 billion to P1.35 trillion in gross value added , equivalent to 2.1 to 6.6% of nominal GDP this year.

Mr. Mapa said to cushion the economic fallout, the government needs to roll out a “timely and sizable fiscal recovery plan” to help stimulate the economy.

He said providing cash to affected sectors is also expected to drive consumption and while “ample support” to small businesses will keep the “backbone of the economy afloat” as this will ensure many Filipinos will keep their jobs.

“A modest fiscal response or a package deployed in a belated manner could find scores of Filipinos already unemployed, with the cost to save the job market more costly,” he said. — Beatrice M. Laforga