THE ASEAN region is seeing some pockets of recovery but the overall picture is mixed with the Philippines and Indonesia the clear laggards in the region, according to Maybank Kim Eng.

The development of a vaccine will help close the gap with other countries that have more successfully contained the virus, it added.

“It was more of a struggle to uncover the ‘V’s in the Philippines and Indonesia, the two ASEAN countries which have yet to flatten the pandemic curve,” Maybank Kim Eng said in a report, referring to the phenomenon of V-shaped recoveries.

In the region, Singapore and Vietnam experienced V-shaped recoveries, it said, with Vietnam the region’s outlier in avoiding a recession this year, and its exports already above pre-pandemic levels.

The Philippine economy contracted by a record 16.5% in the second quarter, which included the weeks when the lockdown was strictest. The government is projecting a less drastic contraction in the third quarter and projects gross domestic product to contract between 4.5% and 6.6% in 2020.

“A vaccine will help improve domestic mobility and ease strict lockdowns and social distancing rules, a shift that will make a significant difference to the larger pandemic-hit domestic economies, particularly the Philippines and Indonesia,” Maybank Kim Eng said.

Maybank Kim Eng said power demand in the Philippines was among the “surprising sharp V rebounds” even with many offices still shut. In September, power demand grew 2.1% year on year coming from the 3.3% contraction seen in August.

The country was also experiencing a “weak V” recovery in remittance inflows as economies hosting overseas workers reopened, Maybank Kim Eng said.

Cash remittances from overseas Filipino workers (OFWs) rebounded to positive year-on-year growth in June and July after sharp declines between March and May. They declined 4.1% to $2.483 billion in August due to weak inflows from the Middle East and Japan.

“Our Chief Economist… thinks that the outlook for overseas workers remittances will likely stay challenging in the near term, especially with the recent new waves of infections that are triggering countries to re-impose restrictions and partial lockdowns,” Maybank Kim Eng said.

Cash remittances to the Philippines declined 2.6% to $19.285 billion in the first eight months. The central bank expects inflows to drop by 2% this year.

The US, which is the largest remittance source for the Philippines, is the world leader in COVID cases, while Europe is currently experiencing a second wave.

More than 231,000 OFWs have been repatriated as of Oct. 25, according to the Department of Foreign Affairs. The government expects about 300,000 OFWs to be brought home by the end of 2020. — Luz Wendy T. Noble