MAP Insights
By Edgardo “Ed” C. Amistad
When the Enhanced Community Quarantine (ECQ) was first put in place, the most nagging question in everybody’s mind was “up to when will the ECQ be?” Or, to be more realistic about it, “when do we start relaxing the ECQ?”
The answer to that question would have been easier to arrive at had we known from the start the ECQ’s objective. But because this was not clearly spelled out, we deduced that since other countries are doing the same to prevent the spread of COVID-19 (coronavirus disease 2019), and that the epicenter of the outbreak, Wuhan City, had successfully contained the virus by way of a lockdown, then the ECQ is the way to go.
It might be worthwhile recalling that during the time COVID-19 was rampaging all over Wuhan City and Hubei province, the World Health Organization (WHO) never suggested to China to do a lockdown; it recommended instead social distancing, proper hygiene, and adequate testing. The stringent lockdown was the sole decision of the Chinese government. So, in a way, it was a bold experiment that succeeded. Other countries or cities like South Korea, Taiwan, and Hong Kong opted for a different approach but they too managed to contain COVID-19. Their mode of control is by way of massive testing, contact tracing, isolation of suspected carriers, and immediate medical intervention.
Since we did not prepare early enough to follow the South Korean model, we have no choice but to pursue the Chinese model. The consequence of adapting the Chinese model is that, unlike the South Korean model, our economy will suffer a big hit from the ECQ.
Why was China successful with its lockdown?
For one, it has an authoritarian government. It can order the citizenry to follow without question. It can mobilize the army to make sure everybody follows the government directives. It can command army personnel to deliver the food and other necessities directly to the people in their homes.
For another, it didn’t have to contend with millions of informal settlers surrounding Wuhan. It also helped that its economy is the second largest in the world; it can afford to provide the supply requirements of the entire province of about 60 million inhabitants effortlessly.
It is worth mentioning, too, that Hubei province does not belong to the top five richest provinces in China, unlike Guangdong and Jiangsu. If it were such, would China have done the same severe lockdown and risk choking the whole economy as we are doing in Metro Manila and other top cities of the country?
After the authorities enforced the ECQ, health experts insisted that we must first flatten the curve before we can lift the restrictions. This means ensuring the number of persons being infected, and those consequently succumbing to COVID-19, does not spike. Otherwise, it will put too much pressure on our health workers and could lead to the total collapse of our health system.
That assertion seems logical. But when the ECQ’s original deadline was about to expire, we still had not instituted enough testing to be confident about where the curve was or where it would be in the weeks to come. Why this was the case was a deep mystery; and since we don’t know where the curve was, our decision on whether to proceed or to terminate the ECQ was based on pure guesswork.
Some experts opined that the decision to extend or to lift the ECQ was a difficult call. If you extend, the economy suffers, affecting not just the livelihood of our citizenry but the very survival of the marginalized sector of society. To lift the ECQ prematurely, on the other hand, means more deaths from infection.
In the final analysis, however, choosing between the two options would have been easier if only we did two things first: one, if we took stock of our resources or the amount of funds we have plus the amount of funds we can borrow without imperiling the economy; and two, we computed the amount needed to feed people who don’t have the money to buy food, the amount necessary to strengthen our health and medical infrastructure to cope with any rise in the number of patients, and the amount required to revive the economy later.
If, for example, given our resources and expected expenditures, we can only tolerate the ECQ for two months, then that ought to be our limit. Even if the curve has not yet flattened, we don’t have the luxury of prolonging the ECQ because doing so would either starve our people or weaken our health and medical systems or sign the economy’s death warrant.
How much would it cost to feed half of our population of 110 million (roughly the number of Filipinos who will need food assistance)?
At an average cost of P200 a day, it will amount to a staggering P330 billion a month, and that’s for food alone. It doesn’t consider yet the logistical requisites or the other basic requirements of the poor, such as water, electricity, medicine, etc. No wonder, many of our people complained that they have not received any assistance from the government. The amount approved by Congress for the sustenance of the needy populace is simply not enough.
As far as the funds to be allotted for our health and medical infrastructures as well as for the economic stimulus are concerned, initial reports from our legislators and the NEDA suggest it will run into the hundreds of billion pesos.
The key variable expense in combating COVID-19 is food assistance. Limiting the duration of the ECQ by just a week can save P82 billion that can then be redirected to the health component. The huge savings can fund the hiring of more health workers, increasing their salaries (the 25% increase given so far is negligible given the risks they are taking — It should be doubled, at least) and subsidizing or completely covering the hospital expenses of COVID-19 patients needing confinement (even the middle-class cringe at this huge unbudgeted expense).
While we are on the topic of government resources, we must consider likewise the grim fact that while expenses will continue piling up, revenues will nosedive. Even if we immediately open the economy, income will likely come in trickles. The hospitality business (hotels, restaurants, airlines, etc.), for example, will take months, if not years, to pick up. Remittances, especially from OFWs, will dry up. Many MSMEs will not be able to reopen for business. Even the country’s top 1,000 corporations will not be immune to the economic downturn. The longer the ECQ, the longer it will take for the economy to gain traction and get back its footing.
In combating COVID-19, our twin goals should be to mitigate the spread of the virus without slaughtering the economy.
There is one serious apprehension with adapting the strategy of “flattening the curve” to address COVID-19.
What if we do flatten the curve but we get hit by a second wave or a third wave of infection? Do we resort to the ECQ again and feed the poor using government funds? Where are we going to get the funds for this kind of protracted warfare?
The worst thing that could happen to us is to blindly use ECQ to address COVID-19 and wait for the curve to flatten only to realize that the virus is still there, and we don’t have enough resources left to feed our people or to re-energize an economy that has gone moribund.
To put ourselves in such a helpless situation would be a terrible tragedy!
This article reflects the personal opinion of the author and does not reflect the official stand of the Management Association of the Philippines or the MAP.
Edgardo C. Amistad is the Chair of the MAP AgriBusiness Committee and the former President of the UCPB-CIIF Finance and Development Corporation.
