PHL in an Ideal Position to Fully Reopen the Economy
I see no other reason why we should not transition to Alert Level 0, where restrictions if any, are most relaxed. All health metrics support the full reopening of the economy. Removing all Covid-19 restrictions, save perhaps for the wearing of face masks, will unleash the full potential of the economy.
The Philippines is in a prime position to fully reopen the economy with what is happening in the rest of Asia. It can take advantage of the economic slack in most of East Asia, where daily Covid-19 cases are still high. South Korea, Japan, Vietnam, Malaysia, Hong Kong and Indonesia are not yet close to containing the infection rate compared to the Philippines.
The Philippines, thus, will be wasting a golden opportunity if it does not fully reopen the economy. The Philippine economy is doing well so far despite mobility restrictions and the lingering effects of the pandemic, and lately the Russia-Ukraine war.
The lower unemployment figures in January indicate an economy that is trying to bounce back from the doldrums. The unemployment rate fell to 6.4 percent from 8.8 percent in January year-on-year, and from 6.6 percent in December last year. The government again resorted to granular or household lockdowns in January when the Omicron variant of the virus swept the nation. The alternative to regional or widespread lockdowns kept our factories open, and allowed many Filipinos to commute, work in restaurants and commercial establishments, and travel to the provinces.
The employment figures released by the Philippine Statistics Authority attest to this. The number of employed persons rose by 1.77 million from 41.25 million in January 2021 to 43.02 million in January 2022. Put in another context, the January unemployment rate of 6.4-percent translated into 2.93 million unemployed Filipinos, down by 1.04 million from the 3.96 million in January of 2021.
We can expect better unemployment figures in February when the Philippines eased the travel and capacity limits on establishments. By containing the Omicron virus and shifting to Alert Level 1 in March, the Philippines is generating more job and economic opportunities.
About 70 percent of the country has shifted to Alert Level 1 since March 15. Per the estimate of the National Economic and Development Authority, the looser restrictions under Alert Level 1 have translated into an additional P10.8 billion a week of economic activity for the country, and 195,000 less unemployed over the next quarter compared with Alert Level 2.
Now is also the opportune time to resume face-to-face classes even under Alert Level 1. The government has estimated that the return of students to their school premises will increase economic activities by around P12 billion a week because of the resumption of related services in the educational institutions. A number of parents, too, will have more time to do other chores—many were forced to reduce work hours to help their children in online classes at home.
The Philippine economy has more room to grow if we only remove the remaining shackles inhibiting its growth. The millions of workers who have lost their jobs due the pandemic have not fully returned. The tourism industry is yet to contribute significantly to the gross domestic product.
But judging from last week’s tourism figures, I can expect the sector’s trickle-down effect in the countryside. From virtually nil at the outset of Covid-19 two years ago, the Philippines has logged 102,031 foreign tourists as of March 16 since reopening its borders on February 10. A more relaxed entry protocols for fully vaccinated travelers from visa-free nations have allowed more foreign tourists to travel to the Philippines.
With further reopening, our economy is poised for a robust expansion this year. Our economic managers are confident of achieving a growth target of 7 percent to 9 percent in 2022, despite the global pandemic and the war between Russia and Ukraine.
I believe we have a strong domestic sector to drive economic expansion. There is still a big segment of the economy that has yet to contribute to the GDP. An immediate shift to Alert Level 0 that will end most of the health emergency restrictions during the pandemic period will provide the impetus for a more robust growth.