Businesses criticize gov’t for lockdown policy flip-flop

By Kyle Aristophere T. Atienza, Reporter

UNSTABLE government policies such as the last-minute decision to postpone the relaxation of quarantine curbs in Metro Manila is likely to further dampen business and consumer confidence, business leaders and economists said on Wednesday.

The government on Tuesday evening abruptly reversed an earlier plan to shift to a general community quarantine with alert levels in Metro Manila starting Sept. 8. Instead, a modified enhanced community quarantine was extended to Sept. 15.

“There is a huge financial cost on business enterprises when plans and preparations are dislocated by the last-minute cancellation or postponement of the anticipated relaxation of the quarantine protocols,” Philippine Chamber of Commerce and Industry Acting President Edgardo G. Lacson said in a Viber message.

He said the last-minute changes in quarantine rules diminished the credibility of the government’s pandemic response and “could be extremely disastrous” in the future.

“Authorities must be prudent in prematurely announcing half-studied policies or policy shifts because it has a tremendous impact on business operations and people’s daily lives,” he said.

The sudden retraction of the granular lockdown policy has only heightened the “mistrust of the private sector in the government’s handling of the pandemic situation,” George T. Barcelona, chairman of the Philippine Exporters Confederation, Inc, said in a Viber message.

Mr. Barcelon said businesses, including small enterprises, were disappointed with the decision because they were already in the process of “preparing workers and supplies.”

“This incident has yet again watered down the trust and competency image of the government,” he said.

The Makati Business Club (MBC) in a statement said it backed the reopening of the economy with “science-backed policies,” noting that many Filipinos are getting frustrated and desperate.

“We welcome strategies like ‘Bakuna Benefits’ and granular lockdowns provided they are adequately supported by contact tracing, quarantine, isolation, hospitalization and testing system that will help avoid recurring surges and broad lockdowns,” it said.

Small, micro and medium enterprises (MSMEs), which account for 99% of registered businesses in the country, are more vulnerable to disruptions because of their limited resources, UnionBank of the Philippines, Inc. Chief Economist Ruben Carlo O. Asuncion said in a Viber message.

“Any COVID-19 policy deemed to be unsure or unstable will be detrimental to economic stakeholders, especially small businesses,” he said.

In a Facebook post, Inchang Mendoza, owner of a Korean barbecue restaurant in the Philippine capital, expressed frustration over the government’s new decision especially since she already made preparations for the restaurant’s reopening. 

Ms. Mendoza said the meat and poultry products they bought would just go to waste since restaurants are still not be allowed to operate under the modified enhanced lockdown.

The lack of government planning just worsened the situation of small enterprises, which generate 5.38 million jobs in the country, said John Paolo R. Rivera, an economist at the Asian Institute of Management.

“They continue to tread the pandemic to survive and provide employment for their team,” he said in a Viber message. “If the government cannot really provide a significant amount of assistance, the least it can do is be decisive so enterprises do not waste resources.” The National Economic and Development Authority (NEDA) estimated that economic losses averaged P73 billion for every week of a modified enhanced lockdown in Metro Manila. Economic losses are estimated to reach P144 billion for each week of a strict lockdown.

Michael L. Ricafort, chief economist at Rizal Commercial Banking Corp., said the government should hold consultations with small businesses and various sectors before coming up with new pandemic strategies to “avoid unintended inconvenience and losses” and “so necessary preparations and costs are made.”

“More effective decisions are hinged on consultations and feedback from the medical experts and frontliners in terms of assessing the capacity of the healthcare system, as well as the most affected economic industries that need some lead times that entail expenses in view of and on top of the existing economic challenges, among others,” he said in a Viber message.

The Philippine Statistics Authority on Tuesday said jobless Filipinos declined to 3.073 million in July, bringing the unemployment rate to 6.9%. This is lower than the previous month’s 7.7%, which translated to 3.764 million jobless Filipinos.

Economic managers slashed their growth target for the year to 4-5% from 6-7% citing the impact of the lockdowns on recovery.

After growing by 3.7% in the first half, the economy now has to expand by at least 4.3% in the second semester to hit the low-end of the target.