Movement restrictions deter PH economic recovery—Moody’s

Published February 18, 2021, 6:55 PM

by Chino S. Leyco

The government’s continued movement restrictions will deter the country’s economic recovery this year, one of three major international credit rating agencies said on Thursday, Feb. 18.

In a credit opinion, Moody’s Investors Service said that the Philippine economy, as measured by its gross domestic product (GDP), is expected to rebound by 7.0 percent this year following a record contraction last year.

“The rebound is supported by base effects and a cautious improvement in consumer spending and investment amid fiscal support,” Moody’s said.

However, the rating agency also noted that the degree and speed of recovery are subject to uncertainties related to the COVID-19 pandemic, as well as progress on vaccination.
        

Moody’s said the ongoing restrictions, including reduced capacity at shopping malls and public transport, as well as curbs on gatherings will likely hamper a quick recovery through the first half of 2021.

Moody’s comment came days after Acting Socioeconomic Planning Secretary Karl Kendrick T. Chua asked President Duterte to place the entire country under the least stringent modified general community quarantine (MGCQ) beginning next month.

Chua said the local economy suffered P1.04 trillion in income losses last year, equivalent to P2.8 billion per day, due to several restrictions imposed by the government.

 To mitigate additional income losses, Chua appealed to the chief executive to further reopen the economy by placing the whole country, particularly Metro Manila, under MGCQ, the loosest quarantine mode.

The country’s chief economist said that further loosening of quarantine restrictions will address the high incidence of hunger among Filipino households.

Based on the Social Weather Stations (SWS) survey last November, Metro Manila has the highest incidence of hunger at 23.3 percent, translating to about 780,000 families. In areas under a more relaxed form of community quarantine, the hunger incidence is lesser.

“Kailangan po natin mag shift sana sa lalong madaling panahon to MGCQ for the entire Philippines, sana starting March 1, 2021, para i-address po yung hunger or yung matataas na antas ng mga Filipino pong nagugutom,” Chua told the president.

  “Ang recommendation po namin ay dapat ibalanse po natin,” Chua said, citing a recent survey by the Pulse Asia also in November, which showed that 73 percent of Filipinos wanted a balance between on the reopening of the economy and the control of the COVID-19.

 Chua also cited another data showing that when the Cabinet approved the further re-opening of the economy in October last year, COVID-19 cases did not spike, nor did it go up during the year-end holiday season. 

 “Hindi naman po natin sinasabi na ibukas lang natin ang ekonomiska at wag na natin paki-alaman yung COVID cases,” Chua clarified. “Kailangan po natin both,” said Chua in a mix of Tagalog and English.

 He also recommended to allow individuals aged five to 70 to go outside their homes as well as the conduct of pilot face-to-face classes in low-risk areas.

 Chua, who heads the state planning agency National Economic and Development Authority (NEDA), likewise proposed to expand the public transport capacity from 50 percent to 75 percent so that more Filipinos could get to work.

The NEDA chief likewise wanted more active transport support, such as additional bike lanes.

“And finally, nakita po namin na kulang po yung inter-province bus operation natin. Maraming pong mang-gagawa nung nag ECQ [enhanced community quarantine] bumalik sa probinsya at ngayon po hindi sila maka-balik ng ganap sa kanilang trabaho,” Chua said.

Following a record economic contraction of 9.5 percent in 2020, Chua said the tradeoff is no longer between health and economy but between COVID-19 and non-COVID-19 threats, such as hunger, poverty, and other disease.

NEDA estimated that each day of general community quarantine (GCQ) is costing the national capital region, Region 3, and Region 4A around P700 million in wages. 

The acting NEDA chief has been pushing for further easing of quarantine restrictions in Metro Manila by providing sufficient and safe public transport as well as allow family activities with strict enforcement of minimum health standards.

Chua said Filipinos now know how to live with the virus and not get sick–by wearing masks, frequently washing hands, and practicing social distancing.

 
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