COVID-19 is not just a continuing national health emergency. It has also spawned a severe economic recession that has set back the country’s growth trajectory for the second consecutive year.
On the same day that the Philippine Statistics Authority announced the lowest rate of joblessness since the start of the pandemic, the Bangko Sentral ng Pilipinas also revealed that inflation in August hit the top of its forecast range in August. These mixed results underline the continuing seriousness of the challenges posed by the country’s economic doldrums.
Quarantine exacts a heavy toll on workers and daily wage earners who are first to be unemployed whenever businesses are shuttered. Economic Planning Secretary Karl Chua estimated the economy was likely to lose around P105 billion for every week of ECQ, and some 444,000 jobs in August 2021 alone. This is a steep price, especially for an economy that already contracted by 9.5 percent in 2020, and whose 2021 full year growth forecast has been scaled down considerably.
Speaking for the economic team, Finance Secretary Carlos Dominguez III echoed an emerging global assessment that with the coronavirus “will not go away easily and may become endemic.” Hence, it is imperative that people learn “how to manage the risks and live with the virus.”
He pointed out the potentially long-scarring effects of hunger, prolonged suspension of face-to-face classes among young learners, and the deferment of treatment of other diseases that have been relegated to the background on account of the highest priority accorded to COVID.
Hence, the economic team is advocating granular lockdowns targeted areas with high COVID incidence, instead of region wide quarantine measures in order to mitigate “long-term scarring and productivity losses.”
Business and industry groups have weighed in on the need to adopt more proactive measures that will revitalize economic activity while protecting the citizenry from COVID infection. The Philippine Chamber of Commerce and Industry supports the new tack of granular lockdowns as this removes the distinction between essential and non-essential economic activities. Recall that the PCCI supported the Employers Confederation of the Philippines’ campaign to generate one million new jobs to jumpstart economic activity. The Management Association of the Philippines expressed its support to the idea of ‘Bakuna Bubbles’ to enhance the mobility of the vaccinated in businesses and workplaces. Their slogan: ‘Vaccinate, vaccinate, vaccinate!’ complemented by ‘Jobs, jobs, jobs!’
Meanwhile, Bangko Sentral Governor Benjamin Diokno affirmed that the monetary authority intends to keep its policy rate steady at two percent to support a recovering but still fragile economy. He expressed confidence that inflation --- now nearing five percent --- will be reined in closer to the midpoint of the two to four percent range targeted in 2022 as non-monetary measures to temper supply-side pressures on food prices are implemented in a timely manner.
The economic managers reflect the hopes of millions of afflicted Filipinos that “granular lockdowns and the heightened implementation of our Prevent, Detect, Isolate, Treat, and Reintegrate + Vaccinate (PDITR+V) strategy, will help curb the spread of the virus, while bringing back jobs lost due to blanket restrictions.”