Time to Shift to Modified GCQ
The economy is showing signs of life in the early phase of its reopening. It is an encouraging sign that health authorities should appreciate while the Philippines continues its battle against the Covid-19 pandemic.
I believe that with the government adopting a surgical approach to contain the coronavirus pandemic, now is the time to allow more industries to reopen under the more relaxed modified general community quarantine (MGCQ) in Metro Manila and nearby provinces.
I fully agree with Finance Secretary Carlos Dominguez III. Putting Metro Manila and the Calabarzon (Cavite, Laguna, Batangas, Rizal and Quezon) corridor under the more moderate MGCQ will accelerate economic recovery “as quickly as possible.”
Secretary Dominguez is being pragmatic about the pandemic. The reality is that the virus will not go away. The country, he says, will have to live with it for a longer period, but “we really should begin opening,” citing that Metro Manila and Calabarzon account for about 67 percent of the country’s gross domestic product.
The economy is now throbbing compared with the early stages of the lockdown. A survey by London-based research firm IHS Markit shows the Philippines’ purchasing manager’s index, which represents factory production, improved to 49.7 in June from 40.1 in May. This is the highest PMI since February this year and signals a movement toward stabilization of the manufacturing sector.
IHS Markit economist David Owen credited the improved PMI to the government’s decision to shift from the enhanced community quarantine to the GCQ in June, allowing factories to resume operations, albeit at a limited capacity. A shift to MGCQ is expected to further boost manufacturing capacity utilization rates.
Another encouraging sign is the 28-percent increase in revenue collections in June, following a 49-percent nosedive in May, after authorities allowed more government offices to reopen.
Combined collections of the Bureau of Internal Revenue and Bureau of Customs reached P211.50 billion in June, up by P59.28 billion or 28 percent from the same month last year, according to Department of Finance data.
The June figures brought total collections in the first half to P1.155 trillion, although they are still down by P220.47 billion or 16 percent from P1.375 trillion a year ago. The DOF noted that the “unprecedented coronavirus pandemic continued to pummel the economy and restrict business activity in most parts of the country.”
Economists from First Metro Investment Corp. and University of Asia & the Pacific also noted similar favorable economic indicators, such as the increase in government spending, stable inflation rate and strong peso. They recommended further easing of quarantine restrictions, such as allowing more employees to return to work and authorizing more public utility vehicles to operate.
While the second-quarter gross domestic product may be worse than the first-quarter contraction of 0.2 percent, there are indications the third quarter may see a much better economic performance, especially as the country’s major trading partners begin to recover.
China, for one, is now moving toward recovery as lockdown restrictions across the globe are slowly being lifted. Multinational holding company Franklin Templeton noted that China’s manufacturing companies reopened with at least 90-percent capacity utilization in a strong sign of movement toward normalcy.
Here in the Philippines, the government is allowing more industries to reopen as long as they observe the health protocols, such as social distancing of at least 1 meter, wearing of face masks, and proper hygiene. We should remain cautious at all times while continuing our work and daily errands to support the needs of our families.
We are hopeful that vaccines are just within months of becoming widely available, with several companies already testing their products among human patients. Pharmaceutical companies Pfizer and BioNTech recently began a clinical trial of an experimental vaccine that triggered immune responses among healthy patients. This is an initial positive report, but it will take larger and more clinical studies to confirm if the vaccine is really safe and successful.
Dozens of candidate vaccines are also on the way to clinical trials, including those being developed by the likes of Inovio, CanSino, AstraZeneca and Moderna. We can only hope that one of them will soon be available to protect us from Covid-19.
For the moment, let us listen to health experts who prescribe health protocols under the new normal. We need to observe these protocols to ensure that the opening of more business establishments won’t be derailed.
The Department of Trade and Industry, meanwhile, plans to increase the dine-in capacity of restaurants, hotels and other establishments from 30 percent to 50 percent in areas under the GCQ. This will encourage these businesses to hire more employees and generate more sales.
Trade Secretary Ramon Lopez was quoted as saying last week that “the higher operating capacity, the more jobs and sources of income we can provide for our workers.”
The Department of Tourism, for its part, wants more tourism establishments to reopen, as it defers to local government units to determine the best time to reopen their respective destinations, sites, attractions and enterprises to tourists. Boracay Island, the country’s major destination, reopened on June 16 to guests from Western Visayas in a phased approach to revive the industry.
We should allow the tourism industry and other sectors to reopen gradually to generate jobs and provide opportunities for millions of Filipinos. Reopening lessens the burden of the government to provide subsidies and paves the strategic path to normalcy.