P8B lost each day during lockdown

The Philippine economy is losing as much as P8 billion a day because of the enhanced community quarantine (ECQ) restrictions, and the government must find ways to boost consumer spending to stop the bleeding.

The heavy cost of a lockdown was discussed at length by Marikina City Second District Rep. Stella Luz Quimbo during a virtual roundtable with The Manila Times on Friday.

Quimbo estimated that the ECQ in the National Capital Region (NCR) or Metro Manila alone results in about P6 billion in losses a day. “But if it includes the nearby provinces, it’s P8 billion a day,” she said.

The government imposed the two-week ECQ that will end on April 11 in NCR Plus — Metro Manila and the neighboring provinces of Bulacan, Cavite, Laguna and Rizal — to curb rising coronavirus disease 2019 (Covid-19) cases.

Today, April 10, the Inter-Agency Task Force for the Management of Emerging Infectious Diseases (IATF-EID) Resolutions will meet to decide whether to continue the lockdown or modify it.

Quimbo sees the country’s gross domestic product (GDP) growth dropping by about 0.5 percent because of the ECQ.

Her estimate is within the 0.5- to 0.8-percent range provided by the country’s economic managers.

Finance Secretary Carlos Dominguez 3rd has said the lockdown “probably will cost us one half of 1 percent [GDP expansion].”

Acting Socioeconomic Planning Secretary Karl Kendrick Chua said the ECQ “may shave off 0.8 percentage points from the country’s full year economic growth in 2021.”

The government expects the GDP to rebound by 6.5 to 7.5 percent this year after shrinking by 9.6-percent in 2020.

The National Economic and Development Authority (NEDA) also expects the lockdown will result in about 252,000 more individuals losing their jobs and 102,000 more poor individuals.

To offset the loss, Quimbo said the government must spend more to stimulate the economy.

“If you ask the economic managers, the amount of deficit spending that they are willing to have is, unfortunately, way less than what we think we should be having,” she said.

This is why the funding for the proposed Bayanihan to Arise As One Act or Bayanihan 3 bill is only P420 billion.

“So, having a number like P420 billion, which is less than P1.3 trillion last year is a reflection of the tension between the two branches, particularly in terms of philosophy with respect to the amount of deficit spending that we ought to have,” she said.

Quimbo said the Philippines has the biggest spending deficit in the Association of Southeast Asian Nations (Asean) region.

“For example, the deficits of Asean countries are somewhere in the 6-percent range [of GDP]. Ours is at 8.9 percent.”

The Philippines is also behind in stimulus spending, with less than 3 percent of GDP, Quimbo said.

“Singapore has an 18 percent stimulus spending relative to GDP. I think Malaysia is 15 percent, Thailand is 12 percent, Indonesia is 5 percent, the Philippines is less than 3 percent,” she said.

Quimbo considered it ironic that “we’re spending the least for stimulus, but our deficit is the highest.”

She said the country’s GDP fell last year because of two things: “We’re not spending enough, and we have the worst Covid situation.”

“We are a consumer-driven economy, so if we help households spend more, then our GDP will become bigger. And when we have higher GDP, we are in fact able to reduce our deficit,” Quimbo said.

Malacañang had raised the possibility that the ECQ in NCR Plus may be replaced with the less restrictive modified enhanced community quarantine or MECQ if certain health conditions were met.

More than 167,000 people are infected with Covid-19, based on the Department of Health’s (DoH) April 8 tally.

Total cases have reached 828,366 with 14,119 deaths since the pandemic started last year.
President Rodrigo Duterte has approved the release of P23 billion in emergency subsidy for 22.9 million individuals in ECQ areas.

ECQ restrictions include strict stay-at-home rule, a ban on mass gatherings, and reduced capacity of businesses and public transportation.

Palace spokesman Harry Roque Jr. said that during the IATF_EID meeting on Thursday, Cabinet officials agreed to let the local governments “at the barangay level” handle the prepositioning of goods, including the distribution of wellness kits to those infected with Covid-19.

Roque also said an additional 2 million doses of vaccines this month are expected to arrive this month from China’s Sinovac Biotech and Russia’s Gamaleya Research Institute.

The government has vaccinated 922,898 people, Roque said.

The country has received 2.5 million doses of Covid vaccines.

The government aims to inoculate 70 percent of the population, or about 70 million Filipinos, before the end of the year.

WITH CATHERINE S. VALENTE