The Philippines Starts to Come Alive

Asia’s strictest lockdown eases

Despite a sudden Friday overnight spike in coronavirus cases, the Philippines today (June 1) is modifying what is arguably Asia’s most stringent lockdown in the country’s most populous regions, shifting to a somewhat less restrictive “general community quarantine” and joining a general movement across Southeast Asia as governments feeling the lash of a major economic downturn are increasingly forced to open up to survive.

Government revenue in the Philippines has plummeted from so-called sin taxes including those on alcohol and cigarettes, sales of which were suspended after laid-off Filipinos immediately began congregating to drink and socialize in the wake of the March 14 lockdown. Police raids were required in poor areas to break up such parties, with arrests that drew criticism from human rights organizations.

The severity of the lockdown has brought economic activity to a near standstill with economists for Bangko Sentral ng Pilipinas, the central bank, projecting full-year GDP loss of anywhere between 2 percent and 3.6 percent for 2020, a shock reversal from the 6 percent to 7 percent growth sustained growth that the country has experienced since 2011.

President Rodrigo Duterte, who has staked his reputation for the efficient government on his “Build Build, Build” program, is seeking to revive the economy through a US$160 billion infrastructure plan including nearly US$80 billion listed as priorities earlier including those that can provide immediate economic impact, including a stalled Cavite expressway running south along the coast before looping over the spine of the mountains near Lake Taal, where a volcano exploded in January which is expected to relieve pressure on the traffic-choked Emiliano Aguinaldo highway. 

Pro-government lawmakers have earmarked PHP 1.5 trillion (US$29.7 billion over the next three years to build roads, health and agriculture facilities in a country with some of the most deficient infrastructure in Asia.  

Jump in new cases

The country recorded 596 new cases on May 30, according to the widely-used website, a distressing rise from the 200 to 250 that have been recorded daily over the past few weeks and the biggest single-day number so far although public health officials said numbers are expected to rise after measures were eased and economic activity resumes. As testing continues to rise, more cases also are expected to be recorded. 

The decision to relax guidelines follows a cautious modification on May 15. Areas where the guidelines are to be relaxed include the sprawling Metro Manila area, with 31 million inhabitants, the Pangasinan area, and Davao City, President Rodrigo Duterte’s political base.

Quarantine the primary weapon

With a substandard health system and inadequate testing and tracing, the government has relied on quarantine as its most important weapon against the virus.  Testing has remained woefully inadequate, with only 3115 tests per million people, a level so low that it puts the credibility of the country’s registered number of cases in jeopardy. 

The country’s health secretary, Francisco Duque, has come under widespread criticism for allegedly mismanaging the response to the virus, partly because of a continuing lack of testing kits and because of overpricing of equipment that has led to charges of corruption. Duque last month said the country would hit 30,000 tests per day by mid-May but it hasn’t come anywhere close to that figure and appears unlikely to.

Duque has also been accused of alarming the public after suggesting the country was experiencing a second wave of the virus although there has been no real indication that the first wave is over. Duque said on May 20 that the first wave of the pandemic occurred from January to February when health experts quarantined three Chinese nationals who tested positive for the virus.

“The first wave came when we had the first lockdown,” Dr. Anthony Leachon, an adviser to the Inter-Agency Task Force Against Covid-19, told the panel. “We have not yet flattened that curve. A second wave happens after that curve is flattened.” 

Government unexpectedly efficient

Nonetheless, for a government that is often looked upon as inefficient, corrupt and undisciplined, however, the lockdown has been inordinately effective, with barangay captains assiduously enforcing the restrictions, in fact earning criticism from human rights monitors. Food distribution has been relatively regular, with households receiving two kg of rice fortnightly along with a range of condiments. Although life in Manila’s most benighted slums, where the temperature routinely reaches 40C and families are crammed into hovels, life can only be described as hellish.

Quarantine passes are handed out to a single person per household. Roadblocks have resulted in arrests of motorists daring the shutdown, which has largely worked, with 157 cases per million people, against a world average of 790. The country has suffered more than 17,000 cases to date, with 990 deaths, an average of nine per million people against a world average of 47.6.

Filipinos have unexpectedly been quite disciplined as well.  The streets are thronged with people wearing masks, with many even wearing masks in their cars. Public transit remains suspended, which provides a welcome relief from the country’s murderous traffic. Manila’s has been rated the worst in the world, although such ratings are subjective at best.

Some economic activity to resume

Economic activity in areas under the general community quarantine (GCQ) will be allowed to resume in low-risk industries including agriculture, food manufacturing, supply chain links, and logistics, according to the new guidelines. With international flight traffic expected to open tomorrow, the government is planning to decentralize landings and takeoffs from Ninoy Aquino International Airport to Clark, Cebu, and Davao with testing laboratories established in those areas for returning passengers.

E-Commerce, electronics and exports, financial services, retail trade, and offshore business processing are to be allowed to resume limited operations while non-essential or leisure-based industries including the country’s rapidly growing gaming industry are still closed.  Offshore business processing is one of the country’s employment mainstays, with thousands of employees continuing to work from home.

Inward remittances from foreign workers have fallen by as much as 20 percent as tens of thousands of workers off cruise ships and freighters have been repatriated, causing anxiety in some communities where locals have expressed fear that the workers would bring the coronavirus home with them despite the fact that they have remained in quarantine for weeks overseas.

Bangko Sentral has cut interest rates sharply, by 1.25 percent to reduce borrowing costs. As with much of Asia, US$660 million in foreign portfolio investment flowed out of the country for April, following net outflows of US$961 million in March. A whopping 61.7 percent of outflows were to the United States according to the central bank’s website.

Other economic measures such as structural reforms on tax incentives (CITIRA) and the liberalization of public services are unlikely to make significant headway in Congress due to the political risks attached to championing these measures, according to a Singapore-based country risk firm. 

According to the President, the rest of the Philippines will be placed under the Modified General Community Quarantine. There are no miracles expected. A foray out into city areas over the weekend showed that Filipinos are largely remaining disciplined and maintain physical distancing and wearing masks.