Posted on May 7, 2020
COVID-19 is serious. There are now over 10,000 cases, some 700 deaths and a Presidential apology to the Ayalas and Pangilinan. Such is the power of the virus.
May 15 is one week away and everybody is antsy. Do we graduate from ECQ to GCQ or stay mired in the status quo? Actually it does not matter. Metaphorically a GCQ simply means going from a maximum to a minimum security cell.
GCQ would be a bone thrown at the nation to show there is progress on COVID. The GCQ will expand the list of companies that can operate and public transportation will be eased but these are not enough. After 60 days of carrying their workers, many businesses will now permanently lay off staff. A quarantine by whatever name – enhanced, modified, generalized or localized – is still a quarantine. Maybe a name change is in order like Back To The Future: Episode 1.
A quarantine means it is still not safe to move around. The Government will still be controlling social activity and scaring us into compliance. It does not trust that we can self-police. It does not instill confidence which is essential for the consumer to spend and for businesses to re-hire and invest. The ban on travel means tourism -which accounts for a big part of the economy – is dead.
We are now in a race to the bottom between COVID and our bank account. The Government is running out of cash and quickly.
The good news is we have a good economic team. DOF Sec. Dominguez has been around the bloc, is fiscally conservative and has the ear of the President. His man Karl Chua is now the acting NEDA Secretary so they are both on the same page, Sonny’s page. Chua, the former World bank senior economist for the Philippines, is a policy wonk. I know that because he uses performance-based, time-bound and transparency in the same sentence. He has a doctorate in economics but that should not be held against him. Jesting aside, Karl looks fine, a worthy Robin to Sonny’s Batman.
Our economic managers are pinning their hopes on Build, Build, Build to save the economy. Understand that BBB has been around for a couple of years with little to show for it. Regulations, bureaucracy and corruption have hampered its roll out; to which we now add social distancing, supply chain disruption, and restrictions on workers’ movement. We could be talking about BBB for a while. BBB is also location specific so the economic benefits will be localized. Team Sonny may want to consider quicker, financially bite-sized, plug and play projects like farm roads, telco and water infrastructure that will spread the stimulus nationwide; while waiting for BBB to happen. These could be the start of an agro-industrial program that will return people to the provinces.
The bad news is our economic managers are not in charge. The President has announced the “last word” is with DOH Secretary Duque which is either a vote of confidence or a death threat. Duterte acknowledged many “vehemently, vehemently (not a typo)” oppose the Health Secretary. Many senior Cabinet Secretaries bite their tongues in silence.
Some quarters have unfairly criticized Sec. Dominguez for being miserly with the stimulus. So far we have spent about 1.9% of GDP which is the lowest among our neighbors and many countries in the world. Sonny’s role is not easy. He is dealing with a boss who believes selling the Cultural Center is a viable fiscal response and who is ready to fire sale the family heirlooms to kill the virus. The CCP could at best fetch a dozen days of aid to the poor. Despite a recent 10% excise levy on oil imports, our tax take is dwindling. Sonny is careful not to blow his wad prematurely.
We recently borrowed from international markets USD 2.3 billion at attractive terms that was four times over-subscribed; but that only covers 10 days of budgeted expenses excluding COVID related costs. There is reportedly Official Development Assistance of another P310 billion or about a month’s burn rate. By the fall we could be down to the Cultural Center. We cannot immediately return to the international bond market without worrying creditors.
The DOH “experts” tell us we should know more on our ETA when further tests are done. This I believe was the same message in April. We are now reportedly testing at 10,000 per day and ramping which in two months could take us to 700,000 tests or 0.007% of the population. That is not statistically significant. The IATF proudly announced we have gone from three test centers in February to around twenty today, to about 70 in the near future. We are also told Vietnam went from three test centers in January to some 120 today which tells us about our capabilities. It also tells us that was a bad comparison to make.
Not willing to watch the grass grow, the private sector is going to test on its own and build a national COVID data base called The Thinking Machine. The DOH, reportedly, shamelessly refuses to share its data in this effort. The DOH also does not allow the private sector to access FASSSTER, the platform used by the IATF to guide policy. Incidentally, this is the same DOH that preaches the over-arching importance of data to combat the virus. Dude, why so territorial? Is it a power and ego thing? Is it afraid to show its numbers have been scrubbed?
On May 15 the ECQ could well move to a GCQ. Optically it looks good but in reality does little to relieve an economy that is in trouble. Q1 GDP contracted by 0.02% after only 15 days of lockdown. Wait till you see the Q2 numbers.
The IATF is dominated by doctors and doctors are by profession not risk takers. They overprescribe medication and tests. They like to operate with certainty. Unfortunately COVID does not give us that option nor the time. Absent a broader mindset a quarantine, I am afraid, looks here to stay, probably into the fall.
The President is looking for guidance on what to do. Somebody might tell him that as of May 4 the official COVID19 website shows only 40% of ICU beds, 43% of isolation beds, 37% of ward beds and 25% of ventilators; are in use. There are thousands of protective equipment. So if he is worried our healthcare system will be overwhelmed, he should not be. As for deaths there are officially 685.
Mr. President, it is just possible there is less to COVID than you are led to believe.
Source: https://heneralunacy.wordpress.com/2020/05/07/a-race-to-the-bottom/