Friday, September 17, 2021

Macroecon 13, More economic damages of strict indefinite lockdown

Former NEDA Secretary Ciel Habito wrote in his column at PDI last Sept. 14 "Pathetic laggard", about the Philippines as back to being the "sick man of Asia."

He cited our low FDI level, lower agriculture growth, compared to our neighbors in the region. But one thing missing -- he not mention the hard, strict, indefinite lockdown as a major reason for being the "sick man of Asia."

Sure the virus also hit TH, ID, MY, SG, CM, JP, KR, ... But how come their economic contraction in 2020 were lower than PH (at -9.6%)? Some of them already had growth in Q1 2021 while PH has -4.2%. Perhaps because Ciel also supported the hard lockdown?

It is true that the PH has low FDI, low agri growth compared to neighbors. But despite those, PH was adding some P1.1 trillion/year (real prices) in GDP size.

PH's GDP size in 2020 was P17.5 trillion, lower than 2018's P18.2 trillion and nearly touched 2017's P17.3 trillion (at constant 2018 prices), numbers in Table 2,

The PH's Q2 2021 GDP size of P4.2 trillion was lower than Q2 2018's P4.7 trillion, lower than Q2 2017's P4.4 trillion, and nearly reached Q2 2016's P4.1 trillion. All at constant 2018 prices.

I have a feeling that with these endless dictatorial lockdowns, curfew and vax discrimination, Q3 2021 will again be lower than Q3 2018's P4.4 trillion, might approximate  Q3 2017's P4.1 trillion.

Two important reports recently: 

(1) Sales, profits fall amid lockdown 
Louella Desiderio  September 14, 2021 | 12:00am

The PwC MAP 2021 Philippine CEO survey presented to the media yesterday showed 70 percent of the CEOs said their average daily sales and profits declined by at least 10 percent each time the country is placed under a lockdown.

Conducted from July to August, the survey had 178 CEOs as respondents, the highest number so far.

(2) Moody’s downgrades PHL growth forecast 
Luz Wendy T. Noble  September 17, 2021 | 12:33 am  

MOODY’S Investors Service once again cut its economic growth forecast for the Philippines to 4.8% this year, citing the impact of stricter lockdowns and the sluggish vaccine rollout on recovery.

Moody’s latest estimate is slower than the 5.8% it gave in July, which was also downgraded from the original 6.3% target. It falls within the government’s 4-5% full-year growth target.

On (1), similar to NEDA estimates of impact of ECQ, etc.

Source: Weekly impact of lockdowns in NCR plus - BusinessWorld (, August 27, 2021.

And this screen shot of Mr. Lacson interview, July 29, 2021.

On (2), if Moody's projection 4.8% growth 2021 is correct, then GDP level 2021 will be P18.34 trillion, similar to 2018 level P18.26 trillion. Three years of econ performance erased despite popn rising by 5 M people.

Note that 2020 GDP level P17.53 trillion was slightly higher than 2017 level P17.18 trillion.

I think that 99% of all economists in this country have supported the prolonged lockdown even if they knew 100% that such policy will shrink the economy hard. Some even rejoiced and commended "burning down our ships to the ground." That only vax-vax-vax is the solution, no natural immunity, no Ivermectin or HCQ or other proven and old but repurposed drugs.

Meanwhile, the vax-vax-vax countries, have they succeeded in reducing high infections and cases? From these countries below, the answer is NO.

Their vaccination rates as % of population as of September 14, 2021:

UK 71.0%, Germany 66.1%;
Israel 68.9%, Iran 27.0%;
Japan 64.7%, Malaysia 66.1%.

I included Iran above despite its low vax rate because it's the country in the MidEast with the largest number of cases and infections.

So the persistent lobby and pressure towards mass vaccination is more political, not medical move. To justify those countries' huge budget for vax procurement and logistics (transpo, storage, etc), the indefinite lockdown, mask mandate.

End the lockdown. End the mandatory vaccination pressure.

See also:
Macroecon 10, Inflation rates June 2021 of the US, PH, July 14, 2021 
Macroecon 11, PH budget 2022 initial numbers, July 28, 2021 
Macroecon 12, August 2021 inflation rate highest since Dec. 2018, September 07, 2021.

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