Alert Level 1 not enough to achieve full economic recovery — NEDA

MANILA, Philippines — Full economic recovery would only be possible if face-to-face classes resume as in-person learning is expected to increase business activity and allow parents to go to work, the National Economic and Development Authority (NEDA) said Tuesday.

NEDA Director-General Karl Chua said while the placing of Metro Manila and 38 other areas under the most lenient Alert Level 1 would generate more economic activity and reduce unemployment, it won't be fully implemented if parents need to stay home to help their children study. Resuming in-person classes, Chua said, would free up the time of one-fourth of parents who skip work or reduce work time to accompany their children who are having online classes.

"If we want a full recovery, Alert Level 1 is not enough. Face-to-face learning should resume," the socioeconomic planning secretary said at a press briefing.

Chua said face-to-face learning would also increase economic activity by P12 billion per week with the resumption of services around schools like transport, dormitories, food stalls and school materials. Resuming in-person learning would also avert about P11 trillion in productivity losses for every year of school closure. He said the Philippines is losing about P22 trillion already since face-to-face classes have been suspended for two years.  

Holding in-person classes would also improve learning outcomes by about 50%, Chua added.

The NEDA chief said the benefits of resuming in-person classes are on top of the economic gains to be achieved from the placing of 39 areas, including Metro Manila, under Alert Level 1. Under the alert status, businesses can serve more customers or clients because they will be allowed to operate at full venue capacity. The capital region and 38 other areas will be under the most relaxed classification from March 1 to 15.

The placing of some areas under Alert Level 1 would result in an additional P9.4 billion of economic activity and P3 billion in salaries per week, according to NEDA estimates. The relaxing of restrictions is also projected to reduce the number of unemployed persons by 170,000 over the next three months.

Chua said the amount of additional economic activity would have been P16.5 billion per week while the additional salaries would have been P5.2 billion if the entire country were placed under Alert Level 1. He added that an Alert Level 1 status for the entire Philippines would have reduced the number of unemployed persons by 297,000.

Trade Secretary Ramon Lopez expressed confidence that the Philippines is heading towards economic recovery. He noted that the Philippine economy grew by 5.6% but it is still below the 2019 level.

"That is the benefit of Alert Level 1. It will now allow us this year not only to hit back the 2019 level pre-pandemic, we can exceed it with the 6% to 7%. But Sec. Karl said it can be even higher than seven percent. Of course, barring outside forces like the Ukraine issue," Lopez said during a meeting of the government's pandemic task force last Monday.

"We are now on the road to full economic recovery towards building back better," he added.