Saturday, July 25, 2020

BWorld 444, Economic hardships worse than virus risks

* My column in BusinessWorld last July 16, 2020.

The Philippines needs to open up the economy fast and not prolong the lockdown, hard or mild. It has some of the worst economic indicators compared to its Asian neighbors.

First, in industrial/manufacturing production. The country has the worst, steepest decline in May 2020.

Second, in the stock market. The country has the worst performance both in the year to date (Ytd, Jan. 1 to July 14) and the past 52 weeks.

Third, in GDP growth. While it had the second highest growth next to Vietnam in the fourth quarter last year (Q4 2019), it experienced the second deepest decline by Q1 2020 next to China. Bad economic performances despite having one of the lowest death rates from COVID-19 in the world (see the table).

Two ASEAN countries reported GDP growth or contraction in Q2 2020: Vietnam with 0.4% and Singapore with -12.6%. This is deep for Singapore.

The Philippines’ GDP data for Q2 2020 will be reported on Aug. 6 and my own projection is -10% or deeper. I based this number on the deep decline in electricity demand in the Luzon-Visayas grids from April to June vs. the same months last year, of -14.7%. The data on monthly megawatt (MW) consumption I got from the Independent Electricity Market Operator Philippines (IEMOP). They conducted the first Market Participants Update (MPU) for 2020 on July 3.

If we open up the economy much wider and clearer, will we not court more COVID-19 deaths?

No. For two reasons. One, as shown in the above table, the feared explosion of death as expected by many people did not happen after five months of scare and alarm. Our 15 deaths per million population is just 1/7 of Germany, 1/28 of the US, 1/44 of the UK, or just 1/5 of the global average of 75.

Two, with or without this pandemic, we expect deaths as part of nature. From the Philippine Statistics Authority (PSA), average deaths per day: 1,591 in 2016; 1,587 in 2017; 1,618 in 2018; 1,658 in 2019 (January-September).

The 2020 projection is 1,684 per day. COVID deaths from March 11 (the first Filipino death) to July 14 is 1,603 over 125 days or 13 people per day. It is possible that with comorbidity, many of the COVID fatalities are largely due to cancer, pneumonia, heart or cardiovascular diseases and the patient got severe virus infection later because of their weak immune system but were registered as COVID-19 deaths.

The economic hardships have been severe so far and we expect the hardships to continue because of the indefinite, no timetable lockdown. People count the COVID-19 cases and deaths but they do not count the poverty- and hunger-related diseases and deaths.

It is true that the virus can evolve and mutate but it is also true that humans also adapt and mutate. On average there are 38 trillion bacteria and 380 trillion viruses in each human body (See “Meet the trillions of viruses that make up your virome” by David Pride, Associate Director of Microbiology, UCSD, and Chandrabali Ghose, Visiting Scientist, The Rockefeller University, Adding a few mutated viruses will not cause severe imbalances in our biological make up.

Open up the economy. Wide and clear. Those scared can wear double masks, double the recommended six feet of social distance to 12 feet, stay home, take the “better Praning than Libing” attitude (“better paranoid that buried”). These are individual actions and are 100% fine. But the healthy and not scared should be allowed to go out anytime anywhere, observing basic hygiene, mask-wearing, and minimum distance of three feet.

See also:
BWorld 441, Decline in pneumonia incidence, June 30, 2020 
BWorld 442, GDP, CO2 emissions, and coal-gas consumption, July 06, 2020 
BWorld 443, Vaccine to avert more IPD, pneumonia deaths, July 19, 2020.

1 comment:

Cara H said...

Interesting thoughts.