BWorld 461, GDP contraction, CDC PH, and medicine taxes

 * My article in BusinessWorld, November 12, 2020.

The Philippine Statistics Authority (PSA) released a bad report, saying that the Philippines’ gross domestic product (GDP) contraction continued in the third quarter (Q3) at -11.5%. The second quarter (Q2) was also revised from -16.5% to -16.9%.

I checked our neighbors’ and some developed countries’ GDP performance and among those with Q3 data, the Philippines is the only country which still has a double-digit contraction. The year-to-date (Ytd) contraction is nearly -10% while our neighbors Taiwan and Vietnam never experienced a recession and have modest growth (see Table 1).

Some people do not appreciate the relevance of GDP percentage changes so here are GDP figures in billions of pesos. GDP is measured via demand or expenditure side, and the supply or industry side. On the demand side, the biggest declines this year are on household consumption and private investments. Investments this year in particular are even lower than the level in 2017. On the supply side, the industry sector suffered a big decline. And our GDP size or flow of goods and services in a year in 2020 is even lower than 2018’s level (see Table 2).

The Philippine government’s strict, indefinite, and no timetable lockdown policy is the main reason for the systematic crippling of the economy.

My alumni group, the UP School of Economics Alumni Association (UPSEAA) held a Zoom lecture given by Dr. Benigno “Iggy” Agbayani, Jr., on “Philippines COVID-19 Response, What we got right and wrong” on Nov. 4. Dr. Agbayani is a fellow UP alumnus (BS Biology, Medical Degree, and Residency at UP-PGH). He is currently the Chairman of the Department of Orthopedics, Manila Doctors Hospital. He is also a co-founder of the Concerned Doctors and Citizens of the Philippines (CDC PH) that campaigns to “Flatten the fear” and lift the lockdown.

On the rising number of cases in the country due to rising tests and false positives, Dr. Agbayani said that viral detection is difficult because viruses are everywhere, too small and have similarities with fragments of other viruses or organisms. No test method actually looks for the virus itself but only detects a signature RNA fragment or surface protein. False positives using the RT-PCR is a major cause of over reporting of cases since even a single fragment of an airborne virus multiplied by 40 cycles will be detected. An asymptomatic case, even if it would turn out to be symptomatic, does not necessarily mean that the person is contagious even with an accurate test positive RT-PCR because it does not measure viral load but merely the presence of a fragment of viral RNA. And this causes many bad policies like being quarantined up to two weeks even without symptoms or being contagious.

On herd immunity, he said that it is the end goal of ending or controlling all epidemics or pandemics. He fully agrees with Dr. Jay Bhattacharya, an economist and public health Epidemiologist at the Stanford School of Medicine, who said that herd immunity is just like gravity. How to get there as safely as possible is the subject of debate ranging from vaccination, infection of the less vulnerable, or by strengthening the immunity response through antiviral prophylaxis, or strengthening innate immunity. Herd immunity can be held off by endless lockdowns, mandatory distancing, etc.

He said that CDC PH offers a three pronged approach to end the lockdowns safely and effectively without the need to isolate the elderly and vulnerable for an indefinite period of time, nor wait for a safe vaccine that may be a year away or may never come. The approach is a combination of the Great Barrington Declaration (GBD) focused protection and a safe approach to herd immunity, the use of proven efficacious and safe antiviral drugs like Hydroxychloroquine, Ivermectin and, in the future, Leronlimab, and strengthening our innate immunity through sunlight or Vitamin D, foods rich in Vitamin C and zinc, exercise, good sleep, stress management, and other lifestyle modification.

Meanwhile, a global coalition of independent think tanks and institutes released a short study and position paper, “Overcoming obstacles to medicine access: Joint policy recommendations to the 2020 World Health Assembly,” released also on Nov. 4.

The study identified two important policy measures. One, reduce unnecessary medicine costs by reducing medicine taxes, abolishing medicine tariffs, and eradicating other trade barriers. Two, accelerate access to medicines by simplifying the drug approval process, modernizing government medicine reimbursement decision-making, promoting genuine free trade in medicines, and supporting the innovation system. The paper can be downloaded at https://geneva-network.com/research/overcoming-obstacles-to-medicines-access/. 

Very often, too much government — like strict and prolonged lockdowns, high and multiple taxes and tariffs on medicines — is unhealthy for the economy and patients.
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See also:
BWorld 458, Property rights and lockdown lefts, October 28, 2020 
BWorld 459, Trump energy policies and the US elections, November 03, 2020 
BWorld 460, Trade, stock markets and indefinite lockdown, November 08, 2020.