The coronavirus pandemic is essentially a health problem, but it is leading to an economic crisis because of the lockdowns that have suspended or even closed down economic activities of all kinds all over the world, United Nations Secretary General Antonio Guterres said at a round-table discussion the other day on “Rebirthing the Global Economy to Deliver Sustainable Development.”
He said: “COVID-19 is a human crisis. But it also became a development and financing crisis as developing countries face vastly increased demands for public spending exactly at the same time as tax and export revenues, inward investments, and remittances are plummeting.”
He added: “We are on the cusp of a widespread debt crisis, with many countries faced with an impossible choice between servicing their debt or protecting their most vulnerable communities and fighting the pandemic….”
The Philippines was among the earliest countries in the world to order lockdowns. This has helped to limit the spread of the killer virus, but the government has had to spend billions of pesos to help all those who have lost all means of income.
At the same time, tax collections went down because business operations ceased. Export revenues went down because the entire world market was down. Remittances of our Overseas Filipino Workers were down; so many of them have now been forced to return home as their host countries have been hit hard by the pandemic.
Secretary General Guterres saw the big picture of so many nations, mostly developing ones but also many middle-income countries, which have defaulted in their debt payments and are now unable to get access to the financial markets.
The Philippines is as only a small part of this big picture, but it is our own big problem and it is shared by our government, our business and industry, and every individual Filipino whose life has been upset by the coronavirus.
Last Thursday, presidential spokesman Harry Roque, meeting with the national media, said that if the country does not reopen soon, many businesses will go bankrupt and many people may die due to loss of livelihood.
Finance Secretary Carlos Dominguez III also said at a meeting of the Inter-Agency Task Force on Emerging Infectious Diseases that the “we need to shift from our priority on health to opening the economy because unless we do, people will simply die because of lack of livelihood.” He said the nation must face the reality that the virus is not going away soon and we should really begin opening the economy. He suggested that lockdowns be limited to the level of barangays and companies with high cases of coronavirus.
The virus first emerged in China in December, 2019, spread around the world, and is now be surging in some countries. We have had our share of infections and deaths but we have not suffered as much as certain other countries like the United States, Brazil, Russia, India, and the United Kingdom.
After various levels of lockdown since March 15, it may be time to reopen more of our economy, before we fall victim to the financial crisis that UN Secretary General Guterres warned about. .