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Economic recovery takes ‘one step back’

The Philippine economic recovery is taking a step back to curb the surging coronavirus outbreak and fix the fragile health system waging a “losing battle” against the pandemic.

Finance Secretary Carlos G. Dominguez III said yesterday that the return of Metro Manila and nearly provinces to a stricter lockdown may take a toll on the drivers of economic rebound in the near-term.

But Dominguez said that if the reimposed stricter modified enhanced community quarantine (MECQ) is correctly implemented, it will have a favorable impact on the nation’s long-term economic prospects.

“In the short run, the return to MECQ may negatively affect livelihoods, consumer demand and production. However, if the time is used to boost all our medical resources and prevent further spread of the virus, then the MECQ will be positive for the long haul,” Dominguez said.

As this is a new virus, Dominguez explained that nations, including the Philippines, continuously learn to adapt to the challenges posed by the new and uncertain environment induced by coronavirus.

The whole world is learning how to dance with this virus: two steps forward and one step back,” Dominguez said.
Earlier, the DOF chief pushed for a shift of Metro Manila and Calabarzon—accounting for about 70 percent of the country’s gross domestic product (GDP)—“as quickly as possible” to the most lenient quarantine status to kickstart the economy.

However, President Duterte ordered Metro Manila, Bulacan, Cavite, Laguna, and Rizal back under the MECQ from August 4 to 18 following a surge of COVID-19 cases and the appeal of healthcare workers.

The two week shift to MECQ for Metro Manila and its adjacent provinces starting today ceased some businesses and public transport, while work and quarantine passes are also reinforced to restrict non-essential movements.

Reverting to MECQ is an unwelcome develop for the economic managers as it could derail hopes for a recovery in the third quarter of the year.

Acting Socioeconomic Planning Secretary Karl Kendrick T. Chua earlier said the economic impact of the quarantine measures in country was “more severe than expected.” 

Days before Metro Maila reverted to MECQ, Dominguez said the local economy had already hit bottom and started to recover from the coronavirus-induced crisis, noting business activities have begun to pick up.

The government had gradually eased the tough virus lockdown measures after the economy shrank by 0.2 percent in the first quarter.


Source: Manila Bulletin (https://mb.com.ph/2020/08/03/economic-recovery-takes-one-step-back/?utm_source=rss&utm_medium=rss&utm_campaign=economic-recovery-takes-one-step-back)

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