ECONOMY STANDS TO LOSE P 1.9T UNDER PROLONGED QUARANTINE

The Philippine economy could shed as much as $38.1 billion (almost P1.9 trillion), or 11.5 percent of gross domestic product (GDP) if COVID-19 quarantine restrictions would remain for six months, Asian Development Bank (ADB) estimates showed.

The Manila-based multilateral lender’s updated COVID-19 economic impact assessment as of June showed that under a three-month containment, losses would reach $25.6 billion (nearly P1.3 trillion), or 7.7 percent of GDP.

Earlier estimates of the National Economic and Development Authority showed that the economy shed P1.1 trillion, or 5.6 percent of GDP across the agriculture, industry and services sectors in the first 45 days of the enhanced community quarantine—said to be one of the most stringent COVID-19 lockdowns in the region.

The ADB’S average stringency index covering 24 Asia-pacific economies showed the Philippines scored 92.9, next to Nepal’s 95.2. .

As such, the average mobility in the Philippines during the lockdown dropped 63.2 percent, exceeded only by the 66.4-percent decline in Sri Lanka.

While parts of the country remained under various stages of quarantine, the government had been gradually easing restrictions, with 75 percent of economic activities allowed to resume last month.

ADB estimates showed that the agriculture, mining and quarrying sector might lose between $2.5 billion and $3.7 billion during three- and sixmonth containment, respectively; business, trade, personal and public services, $10.9 billion-16.3 billion; light/heavy manufacturing, utilities and construction, $8.4 billion-12.6 billion; hotel and restaurants and other personal services, $2.4 billion-3.6 billion; and transport services, $1.3 billion-1.9 billion.

In terms of channels, losses due to Covid-19-related global spillovers to the domestic economy were estimated at between $3.9 billion and $5.9 billion, or 1.2-1.8 percent of GDP during shorter and longer containment, respectively; losses from international tourism demand decline, $4.3 billion-6.3 billion, or 1.3-1.9 percent of GDP; and from domestic demand decline, $17.3 billion-25.9 billion, or 5.27.8 percent of GDP.

During the lockdown, consumption shocks (percentage decline in consumption growth) were estimated at 6.2 percent and 9.3 percent under three- and six-month containment, respectively; investment shocks or decline in investment growth at 13.3-19.9 percent; and decline in tourism receipts at 1.6-2.4 percent of GDP.