• Philippine Resources

Coronavirus may cost PHL up to P2.5 trillion in economic output



THE Philippine economy may lose between P276.3 billion and P2.5 trillion, depending on how the coronavirus pandemic develops in the next few months, according to a state-run think tank.


A discussion paper by the Philippine Institute for Development Studies (PIDS) titled “Projected Disease Transmission, Health System Requirements, and Macroeconomic Impacts of the Coronavirus Disease 2019 (COVID-19) in the Philippines” estimated the trajectory and magnitude of the outbreak in the Philippines under various scenarios.


The country’s economic losses are estimated to reach P2.5 trillion under a “worse case” scenario, where it is assumed that the pandemic is not contained around the world and that the global economy would fall into a recession.


Meanwhile, losses are projected to total P1.6 trillion under a “moderate case,” wherein it is assumed the pandemic is “effectively contained around the world” by the end of the third quarter this year.


For the “best case” scenario, where the pandemic is assumed to be contained globally by the end of the second quarter, economic losses amount to P276.3 billion.


PIDS said the transport, storage, and communication sector is expected to “suffer substantial losses” between P11.7 billion and P124.3 billion due to expected declines in tourism. This is equivalent to around 1.1%-11.3% of the sector’s share of gross value added to the economy.


Other sectors’ projected losses include manufacturing (P82.1 billion-P855.2 billion); wholesale and retail trade (P93.2 billion-P724.8 billion); “other services” (P41.5 billion-P356.9 billion); financial intermediation (P18.5 billion-P141.3 billion); agriculture, forestry, and fishing (P9.4 billion-P110.3 billion); real estate, rental, and business activities (P10.7 billion-P79.7 billion); electricity, gas and water (P5.7 billion-P44.3 billion); mining and quarrying (P1.7 billion-P26.9 billion); and construction (P1.7 billion-P19.3 billion).


“Extending the ECQ (enhanced community quarantine) by one more month may potentially cost the Philippine economy at least P150 billion due to possible declines in household consumption as workers remain unemployed for longer periods,” the think tank said.

The Luzon-wide lockdown was supposed to end on April 12, but President Rodrigo R. Duterte extended it by two more weeks until April 30.


HEALTH PROJECTIONS The PIDS paper also noted that in the aftermath of the ECQ, “aggressive efforts” to isolate at least 70% of infectious cases through improved contract tracing, reduced delays in caring for symptomatic cases, and proper observation of social distancing and individual or household isolation “are necessary to suppress the outbreak.”


“Otherwise, lifting the ECQ but maintaining current conditions of delayed time to seek care for symptomatic cases merely delays the progression of the outbreak but still results in around 8% of the population infected,” PIDS said.


Various scenarios were also provided by PIDS, ranging from no intervention to interventions that require “additional aggressive post-ECQ strategies” such as earlier isolation of as much as 70% of symptomatic individuals on the day of symptom onset as opposed to the day they seek care at a health facility. Across these scenarios, coronavirus infections could range between 904,000 and 18.9 million, with COVID-19-related deaths estimated at around 399,000 to 1.66 million.


With no intervention, the pandemic is expected to peak in the country around August this year, with around 18% of the population (18.9 million) infected with the virus.


On the other hand, a scenario wherein the country is able to isolate 70% of symptomatic cases even with the partial lifting of ECQ, can “drastically” reduce the number of cases on the peak day to 900,000 cases. In this scenario, the peak is predicted to occur in May or June 2021.


In scenarios that do not isolate at least 70% of these cases, the demand for health care resources used in treating COVID-19 at the peak of the outbreak would “far exceed” the available supply.


“[A]ssuming no further improvements in the ability to isolate symptomatic cases post-ECQ, the country’s health system would require 1.51 million beds, 456,000 ICU (intensive care unit) beds, 246,000 ventilators, 727,000 doctors, a million nurses, 91,000 medical specialists, and 36 million PPE (personal protective equipment) sets on the peak day of the outbreak in August 2020,” PIDS said.


The think tank noted that the ECQ in itself is not sufficient to contain the outbreak, as a new wave of infections could rise months following the lifting of the ECQ in the absence of “more aggressive public health interventions.”


“The post-ECQ strategy must be designed to maintain a low level of virus transmission, but economically sustainable. We therefore recommend a gradual and calibrated transition to a risk-based strategy that combines relaxation of economic restriction while controlling the spread of the virus,” the paper read.


“As the economy reopens, the government should continuously expand its capacity to perform the following: detect and isolate individual cases, and identify close contacts; protect high-risk population groups, including health care workers; continuously implement public health measures, such as physical distancing and handwashing; and treat many patients as possible, particularly severe and critical cases.”


To do so, PIDS provided specific recommendations that include increasing testing capacity to reduce turnaround times for laboratory results; increasing contact tracing capabilities; decongesting of health facilities by expanding isolation and quarantine facilities outside hospitals for mild cases or suspected cases with mild symptoms; providing a more humane approach for enforcing quarantine and isolation for suspected and confirmed cases; providing a wide range of support and protection to health care workers; and removing all possible bottlenecks on the production and importation of PPEs.


The PIDS said the general strategy should not be “hospital-centric” and that efforts to control the outbreak should start in local communities, with hospitals serving as the last line of defense.


“The goal of the government should not be solely confined to ‘flattening’ the epidemic curve, but also to limit prolonged disruptions in the economy. A key step towards this direction, of course, is to control the spread of the epidemic. Even during epidemics, the government should ensure that critical goods and services remain available, affordable, and accessible,” it said.


COVID-19 has sickened close to 2 million and killed around 126,000 people worldwide, according to Worldometers website, citing various sources including data from the World Health Organization.


For the Philippines, confirmed cases numbered 5,453 while deaths are tallied at 349, according to the latest data on Wednesday by the Department of Health.


Source: https://www.bworldonline.com/coronavirus-may-cost-phl-up-to-p2-5-trillion-in-economic-output/

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