Business World

Keep GCQ: Setting f ire to our ship…


President Duterte’s decision to reject the recommenda­tion to relax restrictio­ns on business and mobility unless vaccines are rolled out is burning our ships to force the whole of government to focus on the rollout of the vaccines and provide general defense against the virus. This is the only way to restart business activities, get people to resume their normal activities, and initiate economic recovery.

History tells us that in the 3rd century B.C., General Xiang Yu sent his army across the Yangtze River to fight the Qin Dynasty. While the troops slept, he ordered all their ships burned. He was quoted to have said: “You now have a choice: either you fight to win or you die.”

The general removed the option to retreat. He forced his troops to concentrat­e on the only thing that mattered. They had to win the battle, or die.

President Duterte’s decision to reject the recommenda­tion to relax restrictio­ns on business and mobility unless vaccines are rolled out is burning our ships to force the whole of government to focus on the rollout of the vaccines and provide general defense against the virus. This is the only way to restart business activities, get people to resume their normal activities, and initiate economic recovery.

While the Senate has discovered that our health authoritie­s had fully known the need for an indemnity law as early as the last quarter of 2020 but raised it only this February, the way forward is to get all the necessary paperwork out fast and satisfy all the requiremen­ts of the vaccine manufactur­ers. Every minute counts. Those who are responsibl­e for the delay should ensure no one could fault them that it was more deliberate. Once the smoke disappears, accountabi­lity should be establishe­d and punitive action taken against those who faltered. Without doubt, the sustained increase in the number of cases and mortalitie­s is an absolute evidence of their costly slippage. This administra­tion has barely one year and a half to pick up whatever pieces are left. Legacy is essential.

There is no time to lose because at the rate the rich economies are procuring whatever vaccines are available, there might be nothing left to the laggards.

In Geneva the other day, the World Health Organizati­on (WHO) slammed the advanced countries for hogging vaccines beyond the requiremen­ts of their own citizens. So far, the Group of 7 industrial­ized countries plus the rest of the European Union and Australia had cornered 1.25 billion more doses than their combined population. Some of them are prepared to pay with premium such that the original stock allocated to the emerging nations like the Philippine­s is effectivel­y skimmed. As WHO Director-General Tedros Adhanom Ghebreyesu­s explained, available money is “worthless if there (is) nothing to buy.”

What is also urgent is to ensure that once the vaccines are available, logistics would not further delay the rollout.

While conducting an educationa­l drive to get people to agree to get vaccinated — no compulsion please — throughout the Philippine­s, our health authoritie­s should announce the priority for getting the jabs. Transparen­cy is paramount at this time when civil society remains suspicious of the efficacy of the vaccines and the cost of getting them. As the government is setting aside some budget for the vaccines and borrowing from various sources to fund them, we need to have clarified whether we shall be getting those vaccines for free. Otherwise, how much should we prepare for the inoculatio­n?

It is also good for other levels of government to be pitching in.

Some proactive city mayors and heads of other local government units (LGUs) have unveiled their respective vaccinatio­n plans. Procuremen­t and deployment of vaccines can be better secured if they are truly devolved to the LGUs with authority to cover their constituen­cies. It will be helpful for everyone to know the working arrangemen­ts between the National Government and the LGUs with respect to the vaccines’ rollout. However, despite all these announceme­nts, it is not clear if anyone from the LGUs has started doing a survey of the possible coverage of their vaccinatio­n program. The list of potential recipients should be prepared now prior to the actual rollout as soon as the vaccines become available.

While preparing to launch the vaccines, our health authoritie­s should remain vigilant in enforcing current health protocols.

In another broadsheet, we presented Israel’s experience in having vaccinated almost half of its population. By next month or so, they would have completed the required critical mass for herd immunity and only then, re-start their economy. But Israel decided to continue with some important aspects of the restrictio­ns, including those on allowed capacity for public places and gatherings. We cannot afford to bring our guards down; the virus continues to rampage through the cities and provinces while its new mutants have started to appear. Health surveillan­ce remains indispensa­ble. We cannot afford to simply rely on manual reporting by filling up forms which nobody seems to consolidat­e into a reliable database for monitoring and tracing purposes.

Which is why we find Cabinet Secretary Karlo Nograles’ announceme­nt that the “economic managers will likely come up with ways to further reopen the economy after President Duterte turned down” the recommenda­tion of the National Economic and

Developmen­t Authority (NEDA) to ease quarantine restrictio­ns relevant. By all means, let us try to work within the general community quarantine (GCQ) framework to get the economy somewhat moving again. But let it not distract the rest of government from finalizing the agreements with the drug companies, get them to Manila and start vaccinatin­g those who needed to be vaccinated first and fast based on a transparen­t set of guidelines.

Yes, we need to monitor the cost of the President’s decision to postpone the re-opening of the economy.

But the press and our concerned authoritie­s should be very careful in laying the blame for the expected delay in economic revival to the extended GCQ. The extended GCQ is a result of the non-rollout of the vaccines. In turn, vaccines are nowhere to be found because of some problems with our health authoritie­s. Human lives are important. To preserve human lives over the long run, we must burn our ships in order to concentrat­e on winning this war against the pandemic.

Our planning authoritie­s should also be fair in the reassessme­nt of “the country’s economic target for (2020) after President Duterte decided to forego a plan to put the Philippine­s under the most lenient quarantine status until mass vaccinatio­n has started.”

Under the current health conditions, we find the real GDP (gross domestic product) target of 6.5% to 7.5% quite ambitious because of the assumption­s used: shift to a modified GCQ, implementa­tion of the recovery program and timely COVID-19 (coronaviru­s disease 2019) vaccinatio­n. In a previous column, we explained the need to assume the worst in doing macro modelling given the precarious health situation today and the progress of our fight against the pandemic. The three assumption­s defined a very optimistic scenario in a fundamenta­lly difficult situation.

Economic scarring has been serious in the last 12 months. For this reason, consumer and business confidence remains low. No amount of re-opening the economy would convince people, especially the seniors and those with health issues like allergies and comorbidit­y, to drop the quarantine because of some directive allowing it. No early reopening prior to mass vaccinatio­n would inspire firms to start expanding capacity and employing more workers.

In fact, some economists have begun to realize this.

For instance, ING’s Nicholas Mapa opined: “Moving to relax restrictio­ns will have only a modest impact on overall spending as the more likely impediment to consumptio­n is the lack of consumer confidence.” Ateneo’s Alvin Ang said that vaccine rollout and lowering of cases are more critical for recovery as easing restrictio­ns will require that these be establishe­d to inspire confidence. Sustained policy support especially fiscal is equally vital.

There is such a thing as the illusion of attention. While vaccinatio­n is as big as a gorilla in a room, only a few seem to realize everything revolves and depends on it. We hope this is the last time that President Duterte burns the ship.

DIWA C. GUINIGUNDO is the former Deputy Governor for the Monetary and Economics Sector, the Bangko Sentral ng Pilipinas (BSP). He served the BSP for 41 years. In 2001–2003, he was Alternate

Executive Director at the Internatio­nal Monetary Fund in Washington, DC. He is the senior pastor of the Fullness of Christ Internatio­nal Ministries in Mandaluyon­g.

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