The COVID-19 pandemic is essentially a health crisis. The virus that causes it—severe acute respiratory syndrome coronavirus 2 (SARS-CoV-2)—has wreaked havoc on the health of people it has infected. In the Philippines, the number of coronavirus cases is at 65,204 (as of July 17). The number of active cases is at 39,541. If there is a silver lining to all these, it is the fact that more than 22,000 have recovered and we only have a rate of 596 cases per 1 million population. The latter number should be understood with a caveat that most of the cases are in the National Capital Region (NCR).
But this health crisis is developing into an economic crisis. The Asian Development Bank (ADB) projected that the global economy could suffer between $5.8 trillion and $8.8 trillion in losses—equivalent to 6.4% to 9.7% of global gross domestic product (GDP)—as a result of the novel coronavirus disease (COVID-19) pandemic.
Locally, the National Economic and Development Authority (NEDA) predicted that the COVID-19 crisis will cost the Philippine economy P2.2 trillion in losses this year. April figures revealed that around 7.3 million Filipinos have temporarily or permanently lost their jobs due to business closures. The Department of Labor and Employment (DOLE) has a dire estimate of 10 million workers losing their jobs by the end of 2020. The remittances of Overseas Filipino Workers (OFWs)—which has saved us in past economic crises — will be severely hampered as many have lost their jobs too as their host countries struggle economically with the pandemic.
Despite the partial reopening of the economy, domestic consumption, which is the primary engine of the Philippine economy, is nowhere near its pre-lockdown levels. These are dark days in our economy.
A severe slowdown in the economy will have a negative impact on health, specifically our ability to continue the fight against COVID-19. As economic activities wane, spending and tax revenues decline. This will reduce the resources available for the government and even the private sector to protect our people from the virus. Loss of jobs will also negatively impact families because it means loss of income and inability to provide for their families' daily needs, including health.
The lockdown was necessary for March when we were still trying to figure out our “enemy.” Today, a region-wide lockdown might do more harm than good in the long run. The government must perform a delicate balancing act of preserving and protecting our people’s health and avoiding a deeper economic crisis after the pandemic.
We need to control the spread of the virus but at the same time, we cannot allow our economy to free fall into a deep recession that would make our people suffer more even when the fight against the coronavirus is won. And we need to take these actions now not after the pandemic. This is not an either-or proposition. We cannot just impose a lockdown and immobilize the entire economy. We cannot simply open the economy without instituting measures to protect people. It has to be a balanced approach.
The key is in the proactive and decisive localized lockdowns in areas where there are high rates of infections. Health officials and local leaders need to work together to identify where the virus is spreading and immediately lock down a building or a street or a barangay to prevent wider infections. Some local leaders in Metro Manila are already doing this. The approach has to be surgical and systematic. Pinpoint the sources of spread and contain it. In other words, heal the ailing parts without sacrificing the whole.
Government and the private sector also need a serious information drive and an even more serious implementation drive to ensure that people who go out wear protective masks, observe physical distancing, and practice good hygiene.
These are dark times indeed but we have been through other crises before and we have survived. With a proactive and balanced approach, we will survive this too.