Manila and nearby cities would go back to the strictest lockdown level from Aug. 6 to 20 amid a fresh surge in coronavirus infections that may have been spurred by a more contagious Delta variant. 

The presidential palace announced the decision as the Department of Health (DoH) reported 8,562 COVID-19 infections on Friday, the highest in more than two months. This brought total cases to 1.58 million, 61,920 or 3.9% of which were still active.  

The Philippine economy could lose more than P200 billion during the two-week enhanced community quarantine, the National Economic and Development Authority said in a statement. 

It would also increase the number of poor people by as many as 177,000 and add 444,000 jobless Filipinos, Socioeconomic Planning Secretary Karl Kendrick Chua said in a Viber group message. 

The government should use the next three weeks to fast-track vaccinations in high-risk areas, Mr. Chua said. “This way, the enhanced community quarantine will be an investment to pave the way for a recovery once we control the Delta spread.”  

The government also extended the travel ban on India, where the variant was first detected, and its neighbors until mid-August, presidential spokesman Herminio L. Roque, Jr. told a televised news briefing on Friday.  

Covered by the ban aside from India are Pakistan, Nepal, Sri Lanka, Bangladesh, Oman, the United Arab Emirates, Indonesia, Malaysia and Thailand.  

More restrictions were imposed in the capital region starting July 31, including a ban on indoor and al fresco dining at restaurants. 

Physical religious gatherings were also banned, while necrological services, wakes and funerals for those who died of causes other than COVID-19 would be allowed but limited to immediate family members, the palace said. 

Public transportation will continue but only only authorized persons will be allowed to travel into and out of the National Capital Region, Cavite, Bulacan, Laguna and Rizal. 

Outdoor tourist attractions, beauty salons, parlors, barber shops and nail spas may continue to operate at 30% capacity. Indoor sports and tourist attractions won’t be allowed. 

The OCTA Research Group from the University of the Philippines earlier urged the government to impose a “circuit breaker” lockdown to contain a fresh surge in coronavirus infections that may be due to the Delta variant. 

It said about 1,000 cases were being reported daily in Metro Manila. Health authorities have debunked the claim, saying there was no evidence of a surge. 

The death toll rose to 27,722 on Friday after 145 more patients died, while recoveries increased by 2,854 to 1.49 million, the Health department said in a bulletin. 

There were 61,920 active cases, 94% of which were mild, 1.2% did now show symptoms, 2.1% were severe, 1.49% were moderate and 1.2% were critical.   

DoH has reported 216 Delta variant cases, but there could be more undetected cases because of the slow pace of the country’s genome sequencing. 

Only 7% of of 110 million Filipinos have been fully vaccinated against COVID-19. The government seeks to fully immunize as many as 70 million people by year-end. 

Albay Rep. Jose Maria Clemente S. Salceda said lockdowns should only be imposed as a last resort. 

Enhanced community quarantines only work when done early enough,” he said in a statement. “It does not work in response to a wave, because its impact is lagged. We’ll see its benefits only a month later.” — with Russell Louis C. Ku 

The Philippine central bank will keep a supportive monetary policy amid a slower-than-anticipated economic recovery, its governor said on Friday. 

“High-frequency indicators suggest that the economy is gradually recovering from the adverse effects of the pandemic, but it would appear that the recovery is slower than anticipated,” Bangko Sentral ng Pilipinas (BSP) Governor Benjamin E. Diokno told a forum. 

“As such, the BSP will maintain its accommodative stance for as long as necessary to support and sustain the economy’s recovery,” he added. 

The central bank would watch risks to inflation and the growth outlook and would adjust policy settings when needed to maintain financial stability, he said. 

The central bank kept the key policy rate at a record low of 2% at its meeting on June 24, citing threat from the coronavirus and a recovery that had just started. 

“There are still risks to our growth outlook as the presence of the Delta coronavirus variant might give rise to renewed restrictions, similar to what is happening in select cities in Asia, Europe and Oceania,” Mr. Diokno said.  

Economic output fell by 4.2% in the first quarter after a record 9.6% contraction in 2020. 

The central bank chief said there were “promising signs of recovery, including the growth in exports and foreign direct investments (FDI). 

Exports rose by 21.4% to $29.35 billion in January to May from a year earlier, while FDI inflows jumped by 56.3% in the first four months to $3.056 billion. 

Meanwhile, Mr. Diokno said headline inflation was beyond their 2-4% target “due to transitory factors,” but should remain within estimates over the policy horizon.  

“We reiterate that increases in prices owing to supply shocks are best dealt with by supply-side interventions,” he said. 

Meanwhile, July inflation was expected to exceed the central bank’s target for the seventh straight month amid rising oil, food and electricity prices, Mr. Diokno said.  

The consumer price index is expected to rise by 3.9% to 4.7% this month, likely at 4.3%, he told reporters in a Viber message. Inflation in June was 4.1%  and 2.7% a year earlier. 

“Higher prices of domestic petroleum products and key food items along with the upward adjustment in Manila Electric Co. electricity rates and a weaker peso are the main sources of upward price pressures for the month,” Mr. Diokno said. 

Inflation was 4.4% in the first half. The central bank will hold its next policy-setting meeting on Aug. 12. 

The Philippine central bank raised P100 billion on Friday as it fully awarded its short-term securities, with yields rising due to concerns about a looming strict lockdown in the capital region. 

The 28-day securities of the Bangko Sentral ng Pilipinas (BSP) were oversubscribed as it fetched bids worth 117.75 billion. But demand failed to beat the P162.51 billion in tenders at the auction last week. 

Accepted rates were from 1.735% to 1.9279%, wider than 1.745% to 1.7705% last week. This caused the average rate to rise by 1.67 basis points to 1.7769% 

The central bank uses its bills and term deposit facilityto mop up excess liquidity in the financial system and guide market rates.   

The yields increased as investors got worried about the effect of the strict lockdown from Aug. 6 to 20 on the economy, said Michael L. Ricafort, chief economist at Rizal Commercial Banking Corp. — Luz Wendy T. Noble