"A boxer can either get back on his feet quickly and resume fighting right away, or he can rest first."
The first deaths in this country from the newly identified coronavirus strain occurred in the Visayas in January 2020. The two fatalities had flown into this country from China. When the number of deaths steadily rose in February, the administration of President Duterte got alarmed. Upon the advice of the then-newly created IATF (Inter-Agency Task Force on Infectious Diseases), the Duterte administration placed Metro Manila and parts of Central Luzon and Calabarzon under a tough ECQ (Enhanced Community Quarantine).
The lockdown could not have been worse for an economy that in recent years had been posting above-6-percent annual GDP (gross domestic product) growth. All residents of the locked-down areas, except frontliners and “essential” workers, were prohibited from leaving their residences except to buy food and medicines under a quarantine-pass system. Public transportation was allowed but in a reduced-capacity basis. Tourism, entertainment, and hospitality were not allowed to operate. And, of course, social distancing, mask-wearing, and the other health protocols had to be strictly observed.
The combination of ECQ prohibitions and limitations spelled knockdown for the economy. In quick fashion GDP dropped by fully 16.5 percent during the quarter immediately following the imposition of the lockdown; in the succeeding GDP contraction, lower – 11.5 percent – was still horrendous. Predictably, GDP continued its downward trajectory in 2020’s final quarter, though again at a slower pace.
In all, this country’s GDP contracted by 9.5 percent in 2020. There are those who say that the Philippine economy’s performance last year was the worst in its post-World War II history; others contend that it was the second-worst. Whatever the truth, 2020 was for the Philippine economy a year of trauma with a capital T. Like a battered boxer, the economy continues to reel from the knockdown and to try to get back on his feet, assuming that he thinks he can continue to fight.
A boxer who has suffered a knockdown and thinks that he can get back into the match has two choices. He can either get back on his feet quickly and resume fighting right away or he can take full advantage of the mandatory 1-to-10 count and rest first before getting back into the boxing match.
What will the Philippine economy choose to do?
Unfortunately, the economy has no choice in the matter. It has been so weakened and demoralized by the COVID-19 experience – many businesses that closed will probably not be coming back – that it will need time, perhaps up to a year, to really get its strength back. An efficient and massive program of vaccination would shorten the strength-recovery process, but that is unlikely to come into being.
The boxer’s other choice – take advantage of the mandatory knockdown count to rest, assess his situation and get back into the ring when he is again steady on his feet – appears to be the Philippine economy’s only choice. The way things look, with the IATF doing a less than exemplary job of managing the vaccine rollout program and the other facets of the pandemic-eradication job, the Philippine economy will need at least the remainder of 2021 – the three remaining quarters – to get back to a condition to be able to resume and finish the match.