[ANALYSIS] New surge? Duterte reopened economy too quickly

One year after the Philippines’ first lockdown, things are as bleak as ever. 

From March 4 to 10, new COVID-19 cases in the Philippines, based on date of onset, reached a record high of 25,099 (Figure 1). That’s higher than any other week since the pandemic started. The present week, March 11 to 17, looks worse still.

Figure 1.

The situation is even direr when you compare ourselves with our neighbors (Figure 2). In the Philippines new cases are rising exponentially, a trend seen nowhere else in ASEAN.

Figure 2.

There could be a number of reasons for this, including the more transmissible COVID-19 variants, quarantine fatigue, or the abysmal rate of vaccination. 

Above anything else, one can rightly blame the Duterte government’s reckless, overeager push to reopen the economy in recent weeks, which has arguably encouraged people to let their guards down. 

By allowing this new surge to happen, our economy will almost certainly take longer to recover.

Possible factors

In Figure 1, notice that cases didn’t skyrocket until mid-February. What gives?

Could it be the new variants? 

We can’t be too sure yet. The more transmissible UK variant was confirmed on January 13, and the South Africa, Brazil, and Philippine variants were not detected until March. 

The problem is, we can’t even tell how many of the new cases were hit by which variant. According to some experts, the Philippines doesn’t yet have enough genomic sequencing capacity to do that. We’re largely groping in the dark.

At any rate, note that neighboring countries have the new variants as well. Yet their cases are fast declining, not accelerating.

Could it be quarantine fatigue? 

Many Filipinos are tired of hunkering down in their homes. In fact, reunions between families and friends have reportedly become more commonplace nowadays.

While mobility at groceries and pharmacies has reached pre-pandemic levels (Figure 3), mobility at other public places such as malls and workplaces has only inched up rather than risen significantly. Then again, Google may not be capturing the movements of a great many Filipinos, especially those with no mobile phones or internet access.

Figure 3.

Could it be the lack of vaccines?

As of March 18, 240,297 Filipinos have been vaccinated against COVID-19. But that’s just 13,350 a day, and at that rate it will take more than 14 years to inoculate the targeted 70 million Filipinos (the government’s overambitious target by end-2021). In the race between the vaccines and the virus, the virus is clearly winning.

Government reopened too quickly

The recent surge could be a combination of all the above factors. But amid all this, Duterte and his economic managers have relentlessly pushed to reopen huge swaths of our economy. (READ: The mad, reckless rush to reopen the PH economy)

First, for several weeks they’ve parroted nonstop the necessity of reopening.

On February 15 the government’s pandemic task force allowed cinemas, arcades, museums, meeting/conference venues, and religious services to reopen or accommodate more people. 

On the same day, NEDA chief Karl Chua suggested to Duterte in a televised meeting that the entire country ought to be put under the loosest quarantine mode by March 1. 

Other measures were put forward, like allowing 75% rather than 50% seating capacity in buses, jeeps, and other modes of public transportation; allowing people aged 5 to 70 to go out of their houses; and allowing pilot face-to-face classes.

As recently as March 11, as cases started to surge, Duterte said in a speech, “I have to reopen the economy. I’ve given a timetable of just weeks. We cannot forever be in the strict protocols because we have to open the economy. People are hungry…they have to work to eat to survive.” 

Taking their cue from the national government, local leaders have likewise relaxed their quarantine rules, furthering the spread of COVID-19. 

Second, quarantine rules have ceased to be credible, what with blatant violations by many public officials. Large groups meet with little to no social distancing. Many buses and jeepneys have long operated at full capacity. Parents bring their young kids out in the streets. The truth is, the economy has been a lot more open than the government will care to admit. 

Third, government has issued overconfident statements that they’ve managed the pandemic well; Presidential Spokesperson Harry Roque even called it “excellent.” 

Such irresponsible and misleading messaging has encouraged many Filipinos to let their guards down and resume business as usual. Even now, amid a new wave of cases, disturbingly many people can still be seen mingling outdoors.

Amid new variants, quarantine fatigue, and too few vaccines, government as good as told people to lick door handles or cough into each other’s faces. 

Backfire

Government’s reckless bid to reopen the economy has predictably backfired.

Secretary Chua’s NEDA, for instance, went into lockdown from March 15 to 21 as cases were detected among staff. Many other government offices have also been closed down for disinfection.

Meanwhile, Trade Secretary Ramon Lopez, who also pushed to reopen the economy (and told Filipinos to “live with the virus”), caught the disease for the second time around. Other government officials have tested positive, including police chief Debold Sinas (infamous for his rule-breaking mañanita May last year), PDEA director Wilkins Villanueva, and the presidential spokesperson.

What’s more, Duterte’s economic team now finds themselves walking back some of the policies they’ve pushed. 

Secretary Chua, who was deathly averse to lockdowns before, is now more open to them as long as localized. Secretary Lopez is set to issue a circular on March 19 ordering the two-week closure of public areas like cinemas and museums, effectively reversing their February 15 policy. 

It’s not so much “health versus the economy” as “health then the economy.” When will they learn this basic lesson?

W-shaped recovery

The unsettling surge of COVID-19 cases will almost certainly spell a “W-shaped” recession (also called a “double-dip” recession).

Trace the W in your mind’s eye: First the economy tanks because of the initial lockdown. Then it bounces back a bit as the lockdown works (Figure 4). But when government relaxes a bit and reopens the economy prematurely, growth drops again. Growth yo-yos until the final recovery.

Figure 4.

That a double-dip recession follows a premature reopening of the economy should come as no surprise. That’s the topic of a recent paper published in the Journal of Public Economics

Expect more economic pain as the restrictions return: Metro Manila has reinstated curfews and a liquor ban, and select communities are back under strict lockdown. The least the Duterte government can do is provide our people enough economic aid to tide them over. But seeing that they’ve flatly refused to do so in the past year, don’t count on it. 

2021 is turning out to be a rerun of a really bad movie we’ve all seen before. When will this needless suffering end? – Rappler.com

JC Punongbayan is a PhD candidate and teaching fellow at the UP School of Economics. His views are independent of the views of his affiliations. Follow JC on Twitter (@jcpunongbayan) and Usapang Econ (usapangecon.com).

JC Punongbayan

JC Punongbayan is a PhD candidate and teaching fellow at the UP School of Economics. His views are independent of the views of his affiliations.

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