Tuesday, February 09, 2021

Covid 24, Lockdown damages in the Philippines

Some recent reports on the econ damages of strict indefinite lockdown in the Philippines.

Economic recovery in Philippines hinges on kids leaving lockdown 
January 26, 2021

“The example of other countries might shed some light. In Singapore, where schools reopened relatively quickly after the circuit breaker period in June, overall retail sales have already returned to near pre-Covid levels by November,” said Euben Paracuelles, Singapore-based economist at Nomura Holdings Plc.

PH GDP seen to grow 3 percent in 2021, 'best case' at 4 percent
Jan 28 2021 01:17 PM

… best-case scenario at 4 percent with a smooth COVID-19 vaccine rollout and increased government spending on infrastructure and agriculture.

Alvin Ang, director of Ateneo Center for Economic Research and Development, told ANC's Market Edge on Thursday… 

Moody’s Analytics downgrades 2021 PHL GDP 
February 1, 2021 

MOODY’S ANALYTICS downgraded its growth projection for Philippine gross domestic product (GDP) in 2021 to 4-5%, much lower than official forecasts, citing the lack of fiscal support for the economy and the uncertainty surrounding vaccine acquisition.

Philippine economy seen shrinking anew in Q1 
Lawrence Agcaoili - February 1, 2021 - 12:00am

Bank of the Philippine Islands chief economist Jun Neri said the country’s gross domestic product (GDP) may contract mildly in the first quarter. “It seems consumer confidence is starting to show a more meaningful recovery based on the mobility data in the last six weeks of 2020.

Airlines at NAIA try to avert bankruptcy 
Rudy Santos - February 1, 2021 - 12:00am 

Before the pandemic, for instance, Philippine Airlines (PAL) flew around 290 to 300 flights per day including those of their hubs at the Clark and Cebu-Mactan international airports.

Now, the company flies only 90 flights per day and carrying only 40 to 60 passengers in an aircraft that could load up to 300 and 400 passengers, respectively.

Neda chief says PHL can further ease mobility restrictions to restart economy 
By Cai Ordinario  February 2, 2021

Acting Socioeconomic Planning Secretary Karl Kendrick T. Chua said the general community quarantine (GCQ) in Metro Manila and nearby areas costs the economy P700 million in wages and salaries daily. This cripples consumption and hinders the growth of the Philippines economy.

Chua said the government has already extended a P1.258 trillion or 6.7 percent of GDP from the start of the pandemic. Together with the reform bills, the total assistance from the government will reach P2.567 trillion or 13.8 percent of GDP.

PH full economic recovery may take 4-5 yrs: Biz leaders
Bruce Rodriguez, Feb 03 2021 09:03 PM 

Calixto Chikiamco, president of the Foundation for Economic Freedom, said the country's GDP per capita may only go back to pre-pandemic levels within 4-5 years if economic reforms do not push through.

He added that regaining the lost value of the local economy may take two to three years.

PH ‘urgently’ needs to reopen economy as retrenchments pile up, employer group head says 
Feb 04 2021 01:21 AM

According to Employers Confederation of the Philippines (ECOP) president Sergio Ortiz-Luis, the country "relies too much on lockdowns" and restrictions to curb the pandemic, arguing the casualties of the deadly disease were far fewer than the number of cases in the Philippines.

"Nakikita ko 'yong mga listahan na di ko alam kung opisyal or what, 'yong mga ibinebentang kompanya, 'yong mga kompanyang nagbabalak magsara, nakakatakot," he said.

Office space vacancy rising, rental fees falling 
By: Doris Dumlao-Abadilla - Reporter / 05:20 AM February 05, 2021

Metro Manila’s office property space is moving past the 10-percent vacancy rate for the first time in more than a decade and may remain at the double-digit level in the next two years amid a challenging environment brought about by the coronavirus pandemic, property consulting firm KMC Savills Inc. said.

Leasing activity continued to falter all throughout the metropolis with almost 75,300 square meters of Grade A office space vacated in the fourth quarter of 2020. With 1.1 million sq m of office space on tap for 2021, KMC Savills sees more pressure in the market.

Pandemic to raise number of poor in Philippines 
Czeriza Valencia - February 8, 2021 - 12:00am

Meanwhile, mandatory vaccine for all Filipinos for various diseases from TB to measles, rotavirus, HPV, etc. may soon become a law. Anti-Covid vaccine not mentioned yet.

House OKs bill expanding mandatory immunization program on 2nd reading 
By ERWIN COLCOL,  February 2, 2021 7:48pm 


Only 2% of Muntinlupa residents willing to be vaccinated 
Feb. 5, 2021 

And as of today Feb. 9, some 26 countries and economies have reported their 4th Qtr 2020 GDP. The PH is 4th worst:

Azerbaijan -12.4%,  Spain -9.1%, 

Kyrgyztan -8.6%,  Philippines -8.3%,

Austria -7.8%,   Italy -6.6%, 

Portugal -5.4%,   France -5.0%, 

Czech Rep. -5.0%, Belgium -4.8%, 

Mexico -4.5%,   Germany -3.9%, 

Singapore -3.8%,   Russia -3.1%

Hong Kong -3.0%,   Sweden -2.6%, 

US -2.5%,  Indonesia -2.1%, 

S. Korea -1.4%,   Latvia -1.4%,

Serbia -1.3%,   -1.2%,

Uzbekistan 1.6%,   Vietnam 4.5%,

Taiwan 4.9%,   China 6.5%.


A refresher in macroeconomics:

GDP = C + I + G + (X-M).

Where: GDP is the amount of flow of goods and services in a year, C is household consumption, I is investment (private) and G is government consumption. (X-M) is exports of goods and services less imports of goods and services. 

During normal years pre-Covid, C is about 65% of GDP, it's huge. I is about 23% of GDP and G is only about 12% of GDP. (X-M) tend to cancel each other. 

So when you have strict prolonged lockdown, C and I are heavily affected and they constitute about 85% of GDP, so that even if G expands to 15% or 20% of GDP during lockdown, it won't be enough to pull up the entire economy. And so you have huge GDP contraction or "negative growth".

At -9.5% GDP contraction in 2020, PH needs to grow at least 10.5% in 2021 to be at the 2019 level of GDP size. If we grow only 10% or less, we would be at slightly higher level 2018 GDP size. Govt targets 7% but most private banks and investors see only about 4-5% growth this year, so we would be at 2018 level. We lost 3 years equivalent of economic activities. Many hotels, restos, provincial buses, provincial resorts, etc have near zero output 2020 to 2021 when they were growing briskly in 2019 and previous years.

Prolonged, strict lockdown is evil.

See also:
Covid 21, P140.5 billion vaccine budget, January 12, 2021 
Covid 22, Deaths from vax, Studies on lockdowns don't work, January 17, 2021 
Covid 23, Lockdown and travel restriction story, Manila to Mindoro, February 04, 2021.

1 comment:

Dins said...

In the rare case that IATF does think of re-opening something, here comes LGUs and so-called experts raise complaints about it (e.g. cinemas). Disappointing, but no wonder Philippines has the strict lockdown for the past year.