The onset of the wet season coinciding with the gradual reopening of the economy from quarantine may make it more difficult to fight COVID-19, the Department of Finance (DOF) said on Friday (May 15).
“As the rainy season approaches, the battle against the virus will become more challenging,” said Finance Undersecretary Gil S. Beltran.
“The flu season will have started and flooding could occur in low-lying areas. Distancing in temporary relocation sites could be difficult to implement,” said Beltran, also the DOF’s chief economist, in a bulletin.
“The ongoing COVID-19 is, first and foremost, a health issue,” said Beltran.
He said the government response to prevent SARS Cov2, the virus that causes COVID-19, “inevitably made the economy a collateral damage.”
“Such response was, nevertheless, a hedge against further complications,” Beltran said.
“Restoring growth will depend, to a great extent, on the country’s acquiring the capacity to manage the health risks posed by the virus,” he said.
“Such capacity could tilt the odds in what is apparently a life-versus-livelihood dilemma and make it more of a life-and-livelihood dual outcome,” said Beltran
He added that it would be “probably at a lesser scale than before under a ‘new normal’ should there still be uncertainties about the virus.”
Separately, the Manila-based Asian Development Bank (ADB) on Friday said the world economy may shed almost a tenth of global gross domestic product (GDP) because of the pandemic.
Aggressive measures to contain the disease would ease not only the economic pain but also the socioeconomic fallout of such measures, ADB added.
Based on the ADB’s latest estimates, losses could range between $5.8 trillion (6.4 percent of global GDP) and $8.8 trillion (9.7 percent of the world economy).
In Asia-Pacific alone, economic losses were projected to hit as low as $1.7 trillion “under a short containment scenario of three months” or as much as $2.5 trillion under a six-month lockdown, with the region seen contributing around 30 percent of the overall drop in global output, the ADB said.
“Under the short and long containment scenarios, border closures, travel restrictions, and lockdowns that outbreak-affected economies implemented to arrest the spread of COVID-19 will likely cut global trade by $1.7 trillion to $2.6 trillion,” ADB said in a statement.
“Global employment decline will be between 158 million and 242 million jobs, with Asia and the Pacific comprising 70 percent of total employment losses,” it said.
“Labor income around the world will decline by $1.2 trillion to $1.8 trillion—30 percent of which will be felt by economies in the region, or between $359 billion and $550 billion,” ADB said.
The lender nonetheless noted that “governments around the world have been quick in responding to the impacts of the pandemic.”
Governments all over started “implementing measures such as fiscal and monetary easing, increased health spending, and direct support to cover losses in incomes and revenues.”
“Sustained efforts from governments focused on these measures could soften COVID‑19’s economic impact by as much as 30-40 percent,” ADB said.
“This could reduce global economic losses due to the pandemic to between $4.1 trillion and $5.4 trillion,” it added.
“Apart from increasing health spending and strengthening health systems, strong income and employment protection are essential to avoid a more difficult and prolonged economic recovery,” ADB said.
“Governments should manage supply chain disruptions; support and deepen e-commerce and logistics for the delivery of goods and services; and fund temporary social protection measures, unemployment subsidies, and the distribution of essential commodities—particularly food—to prevent sharper falls in consumption,” ADB added.
Edited by TSB
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