Travel curbs stalling PHL recovery—NEDA

By Cai Ordinario, Businessmirror, 10 Nov 2020

File photo: A young girl climbs down from their passenger jeepney at the Tandang Sora terminal, which has been home for her family during a lockdown, June 17, 2020, in Quezon City. About 35 jeepney drivers were forced to stay due to travel restrictions and have made jeepneys their home as the government banned public transport during the community quarantine to prevent the spread of the new coronavirus. Many of the jobless drivers have resorted to begging in the streets, displaying cardboard signs scrawled with pleas for money and food on their multicolored jeepneys.

THE Philippine economy is strong enough to recover the 1.2 million jobs lost during the lockdown, but travel restrictions are slowing efforts to expand business activities, according to the National Economic and Development Authority (Neda).

In a presentation at the opening of the 58th Philippine Economic Society (PES) Annual Meeting and Conference, Acting Socioeconomic Planning Secretary Karl Kendrick T. Chua said the easing of quarantine restrictions from Enhanced Community Quarantine (ECQ) to General Community Quarantine (GCQ) immediately resulted in jobs created.

Chua said between January and April, a total of 8.8 million jobs were lost due to the ECQ but when the country was placed under GCQ, the economy regained 7.5 million jobs.

“What we notice from the three quarters of the labor force survey is that the quarantine level has a very direct and fast impact on the trajectory of employment. In other words the economy is actually strong enough to recover if we allow it to do so,” Chua said.

Chua said opening up the economy means removing mobility restrictions, particularly when it comes to public transportation. He said this despite health protocols crafted by former Health Secretaries Manuel Dayrit and Esperanza Cabral.

These are the seven health commandments—wearing proper face masks; wearing of face shields; no talking and no eating during transit; provide adequate ventilation; frequent and proper disinfection; preventing asymptomatic passengers from taking public transport; and maintaining appropriate physical distancing.

Chua said these minimum health standards are already among the most comprehensive in the world today. These, he said, will help more people regain the confidence to go back to work and boost consumption spending.

Presidential spokesman Harry Roque earlier said that while intrazonal and interzonal travel is now allowed, it is only for Authorized Persons Outside of Residence (APOR).

These kinds of travel restrictions rely on the permission given by local governments or, in the case of islands like Boracay, the regulations set by the Boracay Inter-Agency Task Force.

“The quarantine restrictions prevent the economy from fully recovering and higher quarantine [levels] will be expensive for the government because of the amount of subsidies that we [need to give]. [This will also make it difficult for]people [to meet] their daily needs,” Chua said.

Public transport

Chua, citing Google data, said use of public transport is still down by around 55 percent. The use of public transport fell to as low as a contraction of 80 percent before gradually improving to around -60 percent and -55 percent.

Due to this, he said people actually going to work contracted by around 35 percent on the back of restrictions on the use of public transport. Chua said the recent Neda, Department of Finance (DOF), and World Bank study showed that availability of public transport is the top consideration of workers to go to work.

Chua said Filipinos need to learn how to live with Covid-19 given that any vaccine will not be made readily available for all 8 billion people around the world.

For one, Chua said, data from the Philippine Statistics Authority (PSA) stated that the top causes of death of Filipinos was not Covid-19 between January and August this year.

He said Covid-19 confirmed deaths reached 2,726 during the period and another field in the death record showed “suspected Covid-19” reached around 10,140 between January and August.

However, data showed a total of 23,265 Filipinos died of pneumonia while 60,751 Filipinos died of heart diseases. This is followed by neoplasms, or various types of cancer; cerebral vascular diseases or stroke and diabetes; and hypertension, among others.

“The other data I would like to show is the January to August data of the Philippine Statistics Authority on deaths,” he added. This, he said, “actually show the need to care, also for those other people who are dying because of other factors. The idea here really is to manage the economy and the risk, rather of Covid-19 so that we can care also for the rest of the people.”

Preparing for disasters

In the same forum, World Bank Country Director for Brunei, Malaysia, Philippines and Thailand Ndiame Diop said the Philippines should always be prepared for natural disasters.

Diop noted that 74 percent of the Philippine population is vulnerable to natural hazards like typhoons, flooding, earthquakes and volcanic eruptions.

Climate change only worsens the country’s predicament when it comes to being vulnerable to disasters. Diop said risk models crafted even before the pandemic hit showed disaster could cost the Philippines billions.

He said the Philippines is expected to incur P177 billion or one percent of GDP in losses to public and private assets due to typhoons and earthquakes every year.

In the next 50 years, Diop said risk models estimated that the Philippines has a 40-percent chance of experiencing losses exceeding P1.7 trillion or 8.7 percent of 2019 GDP and a 20-percent chance of experiencing losses exceeding P2.7 trillion or 13.8 percent of 2019 GDP in a single year.

“In addition to idiosyncratic natural disaster shocks, open economies in the Philippines are also exposed to ‘contagion’ shocks transmitted by globalization of markets and finance and greater global connectivity,” Diop said.

Covid-19 is one such shock and Diop said it combined the worst features of all systemic crises in the past 50 years. The pandemic led to a supply and demand shock; a crisis that is domestic, regional, and global in scope; and a crisis that generates a high degree of uncertainty.

In the Philippines, the Covid-19 lockdowns led GDP to contract 0.7 percent in the first quarter and 16.9 percent in the second quarter.

Diop said prior to the pandemic, the Philippines was considered one of the most dynamic economies in East Asia. But, he said, due to the pandemic, they estimate that the economy will contract by 6.9 percent this year.

“That’s an estimated P2.6 trillion or $52 billion of output foregone because of the pandemic. The good news is that the Philippines has managed to build strong macro-fiscal resilience to shocks,” Diop said.

One of the primary policy areas for long-term resilience, Diop said, is spatial planning and infrastructure development. These will be crucial in keeping people safe and boosting the economy.

Diop said investing in sustainable and resilient physical capital such as housing and public infrastructure helps provide shelter against natural disasters by reducing the extent of asset destruction.

Despite this, Diop lamented that there was no systematic project appraisal for climate and disaster risks for infrastructure development. There is also no land available for housing facilities.

“In densely populated neighborhoods, site plans are typically constrained by a lack of available space to maintain the proper functioning of urban ecosystems, such as drainage and open public spaces. All of this results in higher vulnerability of public and private assets to natural disasters,” Diop said.