Diokno projects hockey stick recovery
The whole world is learning how to dance with this virus: two steps forward and one step back
The monetary authorities are convinced the period of non-growth resulting from on and off lockdowns as strategy against the pandemic should be followed by a period high growth at exponential speed, the Bangko Sentral ng Pilipinas (BSP) said on Monday.
According to BSP governor Benjamin Diokno, the decision to shut down the National Capital Region from where the bulk of the nation’s output is produced, along with parallel shutdowns in outlying areas of Cavite and Bulacan, does not render the forecast continued expansion of the economy once the exponential growth of COVID-19 transmissions in the Philippines has been effectively managed.
“The hockey stick-like recovery holds. The first two-week shift from general community quarantine (GCQ) to modified enhanced community quarantine (MECQ) for the greater NCR would have a limited impact,” Diokno said.
He earlier raised the hockey stick metaphor to illustrate the outlook for continued if severely dampened growth of the Philippines over the policy horizon and beyond, one in which pandemic-induced and linear contractions account for the stick part of the metaphor followed by a period of sharp and supposedly exponential expansion of the economy, according to Diokno.
But he acknowledged economy alone cannot manage to stage such a performance: “This coronavirus pandemic is a public health issue with monumental economic implications.”
By public he meant “that each individual has a role to play in mitigating the adverse impact of the crisis on loss of lives, jobs and incomes. The behavior of individuals is an important part of the solution to this unprecedented crisis.”
According to him, finding a solution to the pandemic “takes the form of a public good” or an international public good perhaps, as developed countries may opt to assist less developed countries in fighting the virus.
The whole world is learning how to dance with this virus: two steps forward and one step back.
Finance Secretary Carlos Dominguez III presented a double-edged perspective of the conundrum facing not only the monetary authorities but the general government, whose response to the global health crisis has clearly proven haphazard and inadequate thus far, as well.
“In the short run, the return to MECQ may negatively affect livelihoods, consumer demand and production. However, if the time is used to boost all our medical resources and to prevent further spread of the virus, then the MECQ will be positive for the long haul,” he explained.
“The whole world is learning how to dance with this virus: two steps forward and one step back,” he added.
But among analysts and experts, their view of what lies ahead is more pragmatic, if a little alarming.