Philippines gives economic centers 24 hours to go on lockdown anew

MANILA, Philippines (3rd update: Aug 3 at 11:01 a.m.) — The Philippines would wake up Monday scrambling to adjust to stricter lockdowns due for enforcement in 24 hours, a decision government abruptly made in the wee hours of Sunday after facing renewed public backlash over its pandemic response and an urgent appeal from swamped and exhausted health workers. 

In a late night briefing on Sunday, President Rodrigo Duterte switched Metro Manila, Cavite, Laguna, Rizal and Bulacan back to modified enhanced community quarantine (MECQ) for 15 days from August 4 to 18. 

Since the announcement was made minutes before midnight, the administration essentially gave the public a mere 24 hours to close shops anew, scramble to buy groceries, transact with banks and buy medicines before stricter quarantines that will see checkpoints and quarantine passes return.

Under MECQ, 100% of the population in the sanctioned area are ordered to stay home. For people allowed to go out like health workers, the immediate impact is felt through lack of public transport. Meanwhile, jeepney drivers, some of whom were just recently allowed to earn a living, will be prohibited to ply their routes.

Restaurants that started accepting dine-in customers last June will be forced to scale back workforce to delivery services anew, all while other small establishments like barbershops are forced to close shop again. Non essential establishments in malls will also have to get padlocked for now, while informal workers like street vendors would face arrests from earning a living.

Banks would likewise be affected. Branches will have to cut hours, although the 30-day grace period on loan payments would no longer apply, the central bank clarified on Monday. Governor Benjamin Diokno said the reprieve on loan payments ended "when the Bayanihan Act expired" last June 22. 

Duterte’s fresh lockdown order comes with good intentions. It was an answer to calls from an overwhelmed health sector for a breather over a renewed spike in coronavirus disease-2019 (COVID-19) cases since most of the economy reopened last June, but with COVID-19 testing and contact tracing falling behind, it remains unclear what difference a new lockdown will make. 

That said, the return to MECQ was a short-term fix to cope with a virus resurgence which the Palace had initially dismissed despite hospitals getting swamped by COVID-19 patients. Tigher quarantines came with other proposals already heard in the past such as providing personal protective equipment to nurses and doctors and hiring more health workers in public hospitals. Fresh plans for higher allowances for frontliners were also laid out.

On Saturday, presidential spokesperson Harry Roque quickly turned down a call from health worker groups for a return to ECQ for 15 days to give time to plan out for a better response. But while Roque said then that lockdowns had “served their purpose,” the latest decision tried to depict a government that supposedly listens to the public’s concerns.

Battered economy

The decision comes ahead of the week when various economic data would show bigger economic collapse from COVID-19.

While the central bank expects tempered inflation to have persisted in July once the official inflation report is out August 5, a recession was almost certain to have occurred last June which a separate August 6 data would likely show. Bigger damage to our farmers would also be clearer once farm output figures are out also on August 5.

Before the latest announcement, economic managers have led a resistance within government ranks to return to ECQ, saying the priority has shifted from just saving lives from the disease to saving lives from both the disease and poverty. The economy contracted 0.2% in the first quarter while 7.3 million Filipinos were without jobs as of April.

The Philippine Stock Exchange index is bound to fall in the coming trading week as investors have long feared a return to disruptive lockdowns due to uncontrolled spike in infections. PSEi is one of the world’s worst performing equity markets.

Duterte's decision is also poised to halt an economic recovery that Finance Secretary Carlos Dominguez III said three days ago is slowly happening. State revenues are seen to plunge 16.7% this year and the national government has resorted to record borrowings to plug fiscal holes and keep the government running.

Way back end-March, the Duterte administration promised to assist 13.5 million families cope with lockdowns in two tranches, but has struggled to reach all of them. As of Aug. 1, the social welfare department had only reached 8.98 million families for the second batch of aid supposedly completed by May.

As of Aug. 1, COVID-19 cases in the Philippines have breached the 100,000-mark to reach 103,185. — Prinz Magtulis

Editor's Note: The article was amended to reflect statements from the central bank Governor Benjamin Diokno who said grace period on bank loan payments would no longer be applied under fresh MECQ orders.