A Study Estimates That The Philippines Might Lose Up To ₱2.5 Trillion Due To COVID-19
A study by the Philippine Institute for Development Studies (PIDS) forecasted that the Philippine economy could lose up to ₱2.5 trillion due to the COVID-19. The PIDS is a nonstock, nonprofit government corporation that serves as the government’s primary socio-economic policy think tank.
Their study showed that in a best-case scenario, the Philippines may lose ₱276.3 billion and the worst-case scenario with ₱2.482 trillion According to the said study, the ₱2.5-trillion loss could be realized if the pandemic is not contained around the world, and the global economy slows down into a recession.
The study claims:
The COVID-19 outbreak is expected to affect not only local health systems but also local economies. Arguably, the most direct impact could be observed on the ability of workers to participate in the labor market.
The estimate already takes into account a 5.3% reduction in household consumption due to a 19.7% drop in annual average labor supply coupled with a 20% net reduction in average incomes among displaced workers.
The study found that the most hard-hit sectors would be manufacturing with -₱855.2 billion; Trade with -₱724.8 billion; transportation, storage, and communication with -₱124.3 billion; and agriculture, forestry and fishing with -₱110.3 billion.
However, the study clarified that the estimates are only indicative and are based on specific assumptions on the perceived likely trajectory of the epidemic and consumption patterns
Meanwhile, if the pandemic is effectively contained around the world by the end of second-quarter – which is the best-case scenario – economic losses would amount to ₱276.3 billion.
The study also suggests that imposing community-wide quarantines alone may not be enough to sufficiently flatten the epidemic curve to avert substantial economic losses. In addition, extending community-wide quarantines may increase these economic losses given the same non-medical mitigation measure implemented.
In its projected, extending the Luzon-wide community quarantine by one month is projected to result in at least ₱150-billion worth in foregone economic activity based on our projection assumptions.
The PIDS further recommended for the government to isolate at least 70% of the symptomatic to be able to drastically reduce the number of infected cases on the peak day to 900.000 cases forecasted to occur in May or June 2021, even with the partial lifting of the ECQ.
In summary, the study further emphasizes that extending the ECQ without other mitigation measures merely delays the progression of the outbreak and still results in a large number of cases