Economic recovery still uncertain even as lockdown eases

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Shopping malls are adapting to the “normal” as lockdown restrictions ease in Metro Manila. Courtesy of Trade department

By Beatrice M. Laforga, Reporter

AS the lockdown eases in many parts of the country, experts are divided on how quickly the Philippine economy will rebound from the coronavirus crisis.

Starting today, the National Capital Region (NCR) and a handful of provinces will now be under a general community quarantine (GCQ), a move the government hopes will gradually restart a stalled economy.

“Since many areas are under GCQ in June, including NCR, prospects are better,” Socioeconomic Planning Acting Secretary Karl Kendrick T. Chua said via Viber when asked for his outlook on economic recovery.

Mr. Chua in May said he hoped for a V-shaped recovery this year, as more businesses reopen when quarantine protocols have been relaxed.

For UnionBank of the Philippines, Inc. Chief Economist Ruben Carlo O. Asuncion, the economy may face a sluggish recovery as business activity will remain lackluster as people continue to adhere to physical distancing rules.

“Without a vaccine discovery and its consequent administration to all population, it is difficult to imagine a V-shaped recovery. I do expect a sluggish recovery even as the economy reopens. We have to keep dancing with COVID-19 (coronavirus disease 2019) and keep it at bay as much as we can,” Mr. Asuncion said.

Ronald U. Mendoza, dean of Ateneo School of Government, said the recovery of the Philippine economy would depend on several factors including the health systems’ capacity to prevent a bigger wave of infections, and the psychology of consumers, investors and the rest of the population.

“The ‘psychology of recovery’ depends critically on our trust in the systems that we should have been strengthening during the lockdown. The lockdown was meant to merely buy us time to boost those systems — the surge capacity of the health system and the inclusiveness and effectiveness of the social safety nets,” he said in an e-mailed response.

Mr. Mendoza pointed out the government is only halfway in reaching its target to conduct 30,000 tests per day, while data remains unclear whether the country has flattened the curve.

As of Saturday, the Health department said total deaths stood at 950, while confirmed cases have reached 17,224. Total recoveries now stand at 3,808.

“Social protection is still catching up with the massive task of covering 18 million households (and now OFWs need help too), and up to 300 private hospitals have declared that they are at risk of bankruptcy,” he said.

“This suggests recovery may be tentative and fragile.”

Gross domestic product (GDP) shrank by 0.2% in the first quarter and is expected to contract further in the second quarter as strict lockdown continued through May.

The government is projecting the 2020 GDP to contract by 2-3.4% as economic losses is expected to hit P2.2 trillion due to the pandemic.





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