"In its 12th month of lockdown, Metro Manila continues in GCQ."
As February ends, Metro Manila reaches midway into its 12th month of lockdown.
With the announcement Monday this week that President Duterte had disapproved the recommendation from the IATF that the country shift to modified general community quarantine (MGCQ), the most lenient of the quarantine modes by the beginning of March, Metro Manila, CAR, three cities and four provinces can expect to be in GCQ at least through the first half of March.
In other news, the Philippine Stock Exchange is now requiring an independent valuation as part of delisting requirements and the Dito Community, the telco startup looking to challenge Globe and Smart, is set for commercial launch in March after successfully passing its first network audit.
In the world of business, companies are busy with kickoff activities for the year, activities which, for the first time, must now be done under quarantine conditions.
For business leaders around the country, two questions are paramount: What cam we expect for this year and what should we do now?
The entire island of Luzon was placed under enhanced community quarantine (ECQ), the strictest of the country’s four quarantine modes, beginning 16 March 2020. Since then, different parts of the country have been put under different forms of quarantine as the pandemic evolved and the country learned with the presence of the virus.
The following areas are currently still under GCQ: Metro Manila, Batangas, the Cordillera Administrative Region, Davao City, Iligan City, Tacloban City, Davao del Norte, Davao del Sur and Lanao del Sur.
At the end of last week, the IATF had agreed to recommend a shift to GCQ for the entire country. The shift from GCQ to MGCQ would have meant the following changes: a) full staffing allowed for most offices and enterprises with movement not being restricted to essential travel only; b) face-to-face classes allowed for tertiary education; and c) public gatherings allowed up to 50 percent of capacity.
Only 9 of 17 Metro Manila mayors had voted in favor of shifting Metro Manila to MGCQ and many media accounts on the proposed shift to MGCQ tempered their stories with warnings of potential spikes in COVID-19 infections resulting from loosened controls.
It is unsurprising that so many Metro Manila mayors voted against loosening controls. Weekly new cases in Metro Manila have been relatively unchanged since about the third week of October 2020. While the fact that the pressures of typhoon Ulysses and increased activity over the Christmas season did not create a wave of new cases, there has also not been a marked decrease in transmission since October. In fact, on the Department of Health site, daily new cases, which have been below 500 since the middle of October last year began to breach the 500 mark on 15 February.
The economic imperative
The push for increased movement in the capital region comes from the economic leadership, likely spurred by the fact that the national economy contracted 9.5 percent in 2020, the worst performance in Southeast Asia.
It is unclear at this point how effective a shift to MGCQ would be in fully restarting the economic engine. Simply allowing stores to open does not mean that customers will come. And this is a key plot hole in the recovery storyline. The reality is that one of the weaknesses of the Philippine economy is that it is primarily a service economy with heavy reliance on face-to-face service delivery. Tourism, a significant sector, has been hard hit by the pandemic and indiscriminate acceptance of international tourists come with many problems, including risking another wave of COVID-19 infections.
The reality is that much of the industrial sector is now open and the larger policy focus needs to be how to create economic activity without risking another outbreak. The sticking point for many businesses is transportation and this is potentially something that can be addressed directly.
It is also important to note that Metro Manila has been slowly easing controls since about the third quarter of 2020 and, at this point, most businesses can legally operate, albeit with certain safeguards for safety. The travel ban ended on 31 January and many Filipino Americans applied for a Filipino passport last year so that they could travel to the Philippines as soon as the travel ban ended.
The critical question at this point is how much additional risk loosened controls create versus how much loss is created by these same controls. The question of education is particularly poignant. While many economists have argued that the harm created by losing just months of education is worth the health risk, I have yet to speak to a parent who would knowingly allow their children to walk into a face-to-face classroom if there is still a risk of infection.
And that is the heart of the economic restart conundrum. Large policy decisions are often stymied by individual decisions. Government and capitalists can opt to ask workers to go to work. But those who can afford not to will simply walk away from jobs. Stores can open but customers won’t necessarily come back to shop.
The Monday message from the President quite clearly stated how important a vaccine rollout is to emergence from the pandemic. That clearly needs to be a priority the national agenda.
For business leaders, what is clear is that vaccine rollout will begin by about the middle of this year and that, realistically, herd immunity will not be reached until the middle of next year. As for a critical part of the economy, tourism can not be expected to be fully back until the epidemic is largely controlled in most countries. Again, that will likely not be until next year. However, as it has, we can expect the economy to continue to open up slowly. Companies that are able to provide vaccines to their employees and their families should be in a better position to benefit from loosening of measures.
The god news is that the vaccine will be rolled out and we can finally see the light at the end of the tunnel. What is important now is to hold on and ensure that the journey through the tunnel is put to good use.
Readers can email Maya at [email protected]. Or visit her site at http://integrations.tumblr.com.