Duterte: a ‘gamble’ to rush reopening of economy

President Rodrigo Duterte on Tuesday said the reopening of the Philippine economy should be done gradually and warned that rushing it could lead to more coronavirus infections than the country could handle.

Speaking at a meeting with Cabinet officials,  Duterte said the Philippines could not reopen with “wild abandon” like the United States and Brazil.

He noted that countries that had reopened their economies had seen a resurgence of the new coronavirus.

Earlier, Finance Secretary Carlos Dominguez III said the country’s main economic centers like Metro Manila and the Calabarzon region should move to looser quarantine restrictions as soon as possible to reopen the economy.

‘We are poor’
But on Tuesday, the President said the Philippines, being a poor country, could not afford “a total epidemic or pandemonium.”

“We are poor, we cannot gamble on this. I cannot follow the example of other countries because as the experience has shown, as of now, there were a lot of countries also opening up,” he said.

He said he himself was tired of being cooped up, but allowing people to go out without restrictions would not be good for public health.

“And that is true for your choice and my choice. And so we have to be very circumspect in reopening the economy. It should be gradual,” he said.

If it leads to infections, he said, the cases would be manageable because of the limited number of people allowed to go out.

“Because if you open the entire Philippines and thousands upon thousands of new cases would happen, then we are in deep shit,” he added.

Executive Secretary Salvador Medialdea said in a forum on Wednesday that the country was “on the road toward reopening the economy” and vowed a “strong economic rebound.”

Medialdea said the President’s priority was to save lives and protect communities, the reason he imposed stringent quarantine restrictions in March and provided cash aid to the poor and people who lost their jobs due to the lockdown.

The emergency measures saved thousands of lives but constrained economic activity and affected livelihoods, he noted.

But now that the country’s health system capacity has improved, the government is moving toward reopening the economy, as seen in the easing of quarantine restrictions, Medialdea said.

As the country transitions to adaptation, he said, the government’s priority is a strong economic rebound. “We shall save and restore as many livelihoods as we can,” he said.

During the Cabinet meeting on Tuesday, Carlito Galvez Jr., chief implementer of the National Task Force Against COVID-19, said the second phase of the national action plan was approved last week by the government body overseeing the management of the disease.

Galvez said the first imperative of the plan was to ensure the people’s compliance with minimum health standards to halt the spread of the virus.

People have to have the mindset that the success of the campaign against COVID-19 depends on their support and active participation in preventing the disease, he said.

Galvez also said the national government and the local governments must have the capacity to tackle coronavirus cases to minimize deaths.

“That is what we see, that if we [can manage the death rate], we can [reopen] our economy. That is our ultimate objective,” he said.

Economic recovery
On Wednesday, Dominguez, head of the government’s economic team, expressed optimism that a gradual reopening of the economy while observing minimum health standards would lead to recvery. 

Speaking at a press briefing, Dominguez described the coronavirus pandemic as a black swan event that halted the Philippines’ robust growth. But decisive government steps like the Luzon lockdown in March prevented 1.3 million to 3.5 million infections, he said, citing models developed by the Philippine Council for Health Research and Development and the University of the Philippines.

But the lockdown, which halted 75 percent of the economy, shrank the gross domestic product by 0.2 percent in the first quarter and its extension starting April resulted in a 15-year high unemployment rate, lower tax revenue but higher spending prompted by the government’s coronavirus response, which would expand the budget deficit.

Borrowing
To ensure the availability of funds, the government had to borrow from domestic and foreign lenders, Dominguez said.

To make way for a return to economic activity, the finance chief said the government was ramping up testing for the virus, which would enable healthy workers to go back to their jobs.

Karl Kendrick Chua, the acting socioeconomic planning secretary, said the country could do more than 19,300 tests daily as of July 3 and had capacity for up to 74,000 tests daily or at least 2 million tests a month.

Dominguez said there had been “signs of economic recovery” since quarantine restrictions were relaxed at the start of June. He cited improving import volumes, which reflected “rising economic activity” and narrowing contraction in factory output.

By: Leila B. Salaverria - Reporter / Philippine Daily Inquirer/ —With a report from Ben O. de Vera

Source: Peso Economics