MANILA, Philippines — Economic damage from the coronavirus outbreak and lockdowns enforced to control the contagion have reached P700 billion, Acting Socioeconomic Planning Secretary Karl Kendrick Chua said on Thursday.
The assessment is based on around 244,000 answers to two surveys of consumers and enterprises collated by the National Economic and Development Authority (NEDA) last month. The goal was to gauge how the pandemic, and government efforts to contain it, have affected households and businesses.
“We are not projecting, in general, a positive economic growth for 2020,” Chua told an online forum organized by the Foreign Correspondents Association of the Philippines on Thursday.
“We would rather be conservative and flatten the curve so when we open up the economy, we won’t have regrets,” he added.
In a text message, Budget Undersecretary Laura Pascua said economic managers are set to release next week a new set of macroeconomic targets, which have undergone several tinkering as a result of evolving distractions from the coronavirus disease-2019 (COVID-19).
Apart from taking into account the damage from COVID-19, economic officials also had to amend assumptions to consider the rebasing of gross domestic product (GDP) data to 2018 prices from the old 2000 prices.
Originally, the Duterte administration targeted to grow the economy by 6.5-7.5% this year before the pandemic messed with its plans. On Thursday, Chua provided journalists a rough calculation of zero growth for the entire year, which roughly translates to P1.1 trillion in economic costs from the coronavirus.
“The only thing we are sure of is that we’re not really sure of the trajectory of the economy,” Chua said.
While for the first quarter the economy may still surprise on the upside, Chua said the health crisis already dented chances of growth for the rest of the year. “In fact, it can be slightly negative,” he said.
Last March 17, President Duterte placed Luzon under an enhanced community quarantine (ECQ), a move that effectively paralyzed business and commerce in the main island that generates 70% of the country’s economic output.
The quarantine had since been extended until May 15 for “high-risk” places including Metro Manila and key cities like Cebu and Davao City, while other areas like Davao de Oro will transition to a more relaxed general community quarantine (GCQ).
As some businesses in areas with GCQ status prepare to resume operations, Chua is optimistic that the economy will bounce back by June. “That I think is a very clear indication that we are getting towards some end of the tunnel,” he said.
Back at the finance department where he served as undersecretary for nearly four years, Chua helped craft the government’s four-pillar economic plan, a blueprint of immediate government responses to the virus’ impact.
He is now tasked to develop another program, one that will outline the Duterte government’s over-all economic recovery plan once the outbreak comes into its culmination. Under the program, Chua is carefully balancing the need for the economy to restart while avoiding a potential second wave of infection.
“Some people are basically saying we can lift the ECQ and let businesses resume, but we already know from other countries that too hasty a decision without necessary preparation could lead to a second or a third wave (of infection),” he said.
“We would like to prepare better and recover and sustain that. We don’t want a recovery followed by a sudden collapse again. That would be very bad,” he added.