University of Antique

College of Business and Accountancy

Sibalom, Antique

ECONOMICS 2

News Article

“Economic stagnation, climate woes top risks for Philippine World Economic Forum”

Submitted by:

Anjelika Viesca

Angel Onofre

Honey Freshlyne Nicor

Christel Jean Canja

Laxmi Azmonaviv Campaner

BSA 2A

Submitted to:

Mrs. Cherryville S. Mejares

Instructor

January 29, 2022

 University of Antique
College of Business and Accountancy
Sibalom, Antique

MANILA, Philippines — The difficulty of the economy in recovering from the pandemic and the
worsening climate crisis are among the top risks the Philippines is facing in the near term.

In the latest Global Risk Report of the Geneva-based World Economic Forum (WEF), climate
risks dominated global concerns as economies enter the third year of the pandemic.

WEF refers to “global risk” as the possibility of the occurrence of an event or condition that may
cause significant negative impact for several countries or industries.

For the Philippines, specifically, prolonged economic stagnation was the top risk in the next two
years that the WEF identified.

This pertains to a near-zero or slow economic growth lasting for many years.

“Risks to economic growth are considerable, including risks from a potential resurgence of
COVID-19 as new variants emerge,” the WEF said.

“Most experts believe a global economic recovery will be volatile and uneven over the next
three years,” it said.

Experts earlier warned of the possibility of economic scarring in the country as many businesses
have closed since the pandemic, resulting in job and income losses.

Cases of health insecurities, especially among the poor, and the disruption in education are also
factors that would likely affect productivity and human capital.

Apart from economic stagnation, extreme weather events pose another risk for the Philippines.
This includes loss of human life, damage to ecosystems, destruction of property and financial
loss.

Globally, the top three risks all pertain to the environment: climate action failure, extreme
weather and biodiversity loss. Human environmental damage and natural resource crises are
also among the top 10 risks.

“Densely populated countries that are highly dependent on agriculture—such as India, Nigeria,
Pakistan and the Philippines—are especially vulnerable to climate insecurity,” WEF said.

WEF emphasized that the climate crisis remains the biggest long-term threat facing humanity
and failure to act on climate change could shrink global gross domestic product by a sixth.

Further, another risk for the Philippines is digital inequality or the unequal access to critical
digital networks and technology. This results from the unequal investment capabilities, lack of
necessary skills in the workforce, insufficient purchase power, and government restrictions.

The last two risks for the Philippines are under the societal category: employment and livelihood
crises and failure of public infrastructure.
 University of Antique
College of Business and Accountancy
Sibalom, Antique

The first involves the structural deterioration of work prospects and standards for the working-
age population such as unemployment, underemployment, lower wages, fragile contracts, and
erosion of worker rights, among others.

“The economic fallout from the pandemic is compounding with labor market imbalances,
protectionism, and widening digital, education and skills gaps that risk splitting the world into
divergent trajectories,” WEF said.

“Many countries will be held back by low rates of vaccination, continued acute stress on health
systems, digital divides and stagnant job markets,” it said.

Failure of public infrastructure, on the other hand, is the unequitable and insufficient public
infrastructure and services as a result of mismanaged urban sprawl, poor planning and under-
investment, negatively impacting economic advancement, education, housing, public health,
social inclusion and the environment.

While the top long-term risks relate to climate, the top shorter-term global concerns include
societal divides, livelihood crises and mental health deterioration.

The outlook for the world over the next three years remains tilted to the downside with 41.8
percent believing that recovery will be consistently volatile with multiple surprises.

Some 37.4 percent also expect fractured trajectories while only 10.7 percent sees accelerating
global recovery.
 University of Antique
College of Business and Accountancy
Sibalom, Antique

I. SUMMARY
Manila, Philippines on January 13, 2022, the difficulty of the economy in
recovering from the pandemic and the atrocious climate crisis are among the top risks
that our country is facing in the near term. The Geneva-based World Economic Forum
(WEF) in their latest Global Risk Report proclaims that the climate risks dominated global
concerns as economies enter the third year of this pandemic. WEF defines global risk as
the possibility of the occurrence of an event or condition that may cause significant
negative impact for several countries or industries. Particularly, prolonged economic
stagnation was the utmost risk in the next two years that the WEF identified. This
pertains to a near-zero or slow economic growth lasting for many years. The WEF said
that risks to economic growth are considerable that includes risks from potential
resurgence of COVID-19 as new variants emerge. Moreover, experts believe that a
global economic recovery will be unsteady and uneven over the next three years.
As many businesses have closed since the pandemic, resulting in job and income
losses, the experts have warned of the possibility of economic damage. Health
insecurity, particularly among the poor and disruptions in education are also likely to
affect on productivity and human capital. Aside from economic stagnation, the
Philippines is also vulnerable to severe weather disasters. This encompasses human life
loss, ecosystem devastation, property destruction, and financial loss. Digital inequality or
unequal access to essential digital networks and technology is also a threat to the
Philippines. Unequal investment capacities, a lack of critical skills in the workforce,
limited purchasing power and government prohibitions all contribute to this. Job and
livelihood difficulties, as well as public infrastructure failure are Philippines’ last two
vulnerabilities that are sociological in nature. The first is the structural deterioration of
working-age people’s job prospects and standards, such as unemployment,
underemployment, lower wages, uncertain contracts and loss of worker rights, to name
a few. On the contrary, failure of public infrastructure refers to inequitable and
insufficient public infrastructure and services as a result of mishandled urban expansion,
poor planning and underinvestment, all of which have a negative impact on economic
advancement, education, housing, public health, social inclusion and the environment.
The world’s view for the next three years remains pessimistic, with 41.8 percent of
respondents predicting that recovery will be constantly volatile, with several setbacks.
Some 37.4 percent also predict broken trajectories while only 10.7 percent sees rising
global recovery.
 University of Antique
College of Business and Accountancy
Sibalom, Antique

II. REACTION
As economies emerge from the shock and stimulus of COVID-19, business face a
shakeout, crumpled educational system and other economic issues arises. Reports from
the WEF states that the Philippines is showing a stagnant growth with regards to our
economy. The WEF added that climate change continues to be a disastrous threat to
which no one is immune. Despite the fact that global emissions fell in the first half of
2020 as a result of global lockdowns, evidence from the 2008-2009 Financial Crisis
suggests that emissions could recover. The transition to greener economy cannot be
prolonged until the pandemic’s shocks have dissipated. The most severe and second
most likely long-term issue identified in the GRPS is the failure of climate action.
Extreme weather, climate action failure, and human-caused environmental damage are
among the most likely risks in the next ten years, and also digital power concentration,
digital inequality and failures in terms of cybersecurity. Infectious diseases top the list of
the highest impact threats for the next decade, followed by climate action failure and
other environmental hazards, weapons of mass destruction, livelihood crisis, financial
crisis, and IT infrastructure breakdown.
Apart from the economic stagnation, the country also experienced destruction of
property. The typhoon Odette devastated the Philippines way back December when it
made its landfall in the country. It was tragic and excruciating to see the aftermath of
the typhoon. Buildings, business establishments, schools and different infrastructure
were destroyed. The residents struggled to rise as they will have to start from scratch.
Aside from this, cases of health insecurities especially among the poor also affects the
productivity and human capital. The last few days were reminiscent of 2021, when
pharmacies were running out of paracetamol and analgesic brands which results to
panic buying. The Pharmaceutical and Healthcare Association explained that the
temporary shortage of paracetamol brands was caused by increased vigilance against
Omicron and an increase in the number of individuals being sick of various causes.
The crisis has disproportionately affected particular individuals and countries due
to underlying inequalities in healthcare, education, financial stability and technology.
COVID-19 has not only killed almost two million people as of this writing but the
economic and long-term health effects will continue to be devastating. The economic
impact of the pandemic equivalent working hours, a loss of 495 million jobs in the
second quarter of 2020 alone will increase inequality immediately but so will an
unbalanced recovery. The main short-term hazards to the world, according to over 60%
of GRPS respondents, are infectious diseases and livelihood difficulties. The risk of social
cohesion degradation another significant short-term concern outlined in the GRPS, will
increase as more as lives and livelihoods are lost.
 University of Antique
College of Business and Accountancy
Sibalom, Antique

III. CONCLUSION
To conclude, as economies recover from the shock and stimulus of COVID-19,
businesses will be shaken, the educational system will be damaged, and new economic
concerns will surface. According to the World Economic Forum, the Philippines' economy
is growing at a snail's pace. Climate change, according to the WEF, continues to be a
catastrophic threat to which no one is immune. Extreme weather, climate action failure,
and human-caused environmental damage, as well as digital power accumulation, digital
inequality, and cybersecurity failures, are among the most likely threats in the next ten
years. The current economic, technical, and reputational pressures on business risk a
disorderly shakeout, threatening to leave a huge proportion of employees and
enterprises behind in the industries of the future. Governments must strike a balance
between managing the pandemic and economic recession while also offering new
opportunities that are critical to social cohesion and population stability. In an era of
compounded economic, environmental, geopolitical, and technical dangers, growing
societal fragmentation as expressed by recurrent and developing risks to human health,
rising unemployment, widening digital divisions, and youth disillusionment can have
significant consequences. Due to underlying imbalances in healthcare, education,
financial stability, and technology, the crisis has adversely impacted certain individuals
and economies.
 University of Antique
College of Business and Accountancy
Sibalom, Antique

REFERENCES:

News article from PhilStar Global authored by Louise Maureen Simeon, January 13, 2022.

Simeon, L. M. (2022). Economic stagnation, climate woes top risks for Philippine WEF. PhilStar Global.

https://www.philstar.com/business/2022/01/13/2153480/economic-stagnation-climate-woes-top-risks-
philippine-wef