"With the lockdown, almost all economic activity in the ECQ areas ground to a halt."
"With the lockdown, almost all economic activity in the ECQ areas ground to a halt."
There are still three weeks in June, but in view of what has been happening recently, it is virtually certain that 2020’s first semester will prove to be a very bad time for the economy of this country.
With the exception of the two weeks following March 15, the first quarter of 2020 was a normal, i.e., no-lockdown period. Public-health safety protocols—body temperature checks, admonitions regarding social distancing, discouragement of large social gatherings, etc.—were already being introduced, but people generally were going about their usual business and economic activity in accordance with the accustomed everyday behavior of producers, consumers, workers and investors. Business establishments operated for the usual number of hours every day, goods were produced and distributed according to the usual schedules and consumers indulging their buying habits without restrictions or limitations of any kind. In short, January 1-March 15 was a normal time for the Philippine economy.
The 5.9-percent growth of this country’s GDP (gross domestic product) in 2019 came as a disappointment to the gung-ho economists and financial analysts who fully expected the Philippine economy to end the year closer to the NEDA (National Economic and Development Authority) projection of GDP growth in 6.5-7.5 percent range. They were convinced, as the year began, that the 5.9 percent figure was just a brief break in the trend and that the Philippine economy’s good macro-economic fundamentals would ensure a return, in 2020, to the above-6-percent GDP growth record of recent years.
That would very probably have been the case were it not for something that most people outside the science community could neither foresee nor anticipate: the coronavirus, or COVID-19. The scientists saw an outbreak coming, but the rest of the world didn’t. COVID-19 came roaring out of central China at the start of 2020 and has since ravaged everything and everyone in its path. It has shut down completely or has disrupted severely the economies of the world’s wealthiest countries, including the US, China, Japan, Russia, the UK, France and Italy. The economic toll of the coronavirus has been grievously heavy: the International Monetary Fund (IMF) has tentatively placed the eventual loss of world production at around 2 percent. The human toll has been ever more grievous; nearly 500,000 people have lost their lives thus far.
The world’s epidemiologists told the international community that experience with past pandemics, especially the Spanish flu pandemic of 1918-1919, show that the most effective ways of stopping the transmission of the coronavirus was to reduce to a minimum movements and physical proximity of people. That meant locking down entire areas and making people stay indoors. Heeding the advice of the scientists, and following the example of China and other COVID-19-hit countries, Malacañang placed Metro Manila and Cebu City under ECQ (Enhanced Community Quarantine) and a number of other localities under a less rigorous quarantine status (GCQ or General Community Quarantine), effective March 16.
With the lockdown, almost all economic activity in the ECQ areas—with few exceptions, the most important being the selling and delivery of food items and medicine—ground to a halt. Thousands of business enterprises closed their doors, rendering hundreds of thousands of workers jobless, and, with the suspension of public transport, factories were idled and the streets became lifeless. Never in its history has the Philippine economy experienced anything like what it has gone through since March 16. Lockdown has become knockdown.
ECQ has been devastating for the businesses and people of a region whose production accounts for approximately 20 percent of this country’s GDP. Its effect on the economies of the immediately surrounding regions—Calabarzon and Central Luzon—has likewise been severe. With infections and deaths still rising, albeit at slower rates, a quick turnaround for the Philippine economy cannot be expected; the IATF (Inter-Agency Task Force) on COVID-19 will want to proceed cautiously on the easing of the Modified ECQ and GCQ guidelines.
The economic scorecard for 2020’s two quarters may be said to be: Good Q1, Very Bad Q2. The latter having more than cancelled out the former, the Philippine economy’s first-semester score is Very Bad.