Apart from its devastating toll on life, the COVID-19 crisis is now estimated to plunge up to 60 million people into extreme poverty, according to the World Bank.
“The pandemic and shutdown of advanced economies could push as many as 60 million people into extreme poverty—erasing much of the recent progress made in poverty alleviation,” said World Bank Group president David Malpass, who adds that forecasts point to “as much as minus five percent recession for the global economy” this year.
To combat the pandemic’s effects, the global organization, which is dedicated to eradicating poverty, has launched emergency response operations in 100 developing countries or 70 percent of the world’s population. The program will deploy $160 billion in grants and financial support over 15 months—the largest and fastest response in the World Bank’s history.
“To return to growth, our goal must be rapid, flexible responses to tackle the health emergency, provide cash and other expandable support to protect the poor, maintain the private sector, and strengthen economic resilience and recovery,” says Malpass.
More specifically, the Work Bank’s operations will focus on strengthening health systems, scaling up social protection (to help families restore income), supporting businesses and preserve jobs, and procuring medical equipment and supplies.
Of note, Malpass highlights the reopening of advanced economies as well as remittances, trade finance, and tourism as critical to the recovery of developing countries.
In the Philippines, remittances from overseas Filipino workers are key to the country’s economic growth. In the Philippine Star, economist Euben Paracuelles from the Japanese investment house Nomura predicts remittances to drop by as much as seven percent this year. In a separate report from the South China Morning Post, the Ateneo Center for Economic Research and Development in Manila pegs the estimated $30 billion remittances from 2019 to fall to $6 billion in 2020.
The World Bank describes the Philippines as “one of the most vibrant economies in the East Asia Pacific” region and reports that poverty in the country declined from 23.3 percent in 2015 to 16.6 percent in 2018. However, the COVID-19 pandemic will have negative effects on both its economic growth and poverty reduction.