Slowly

Sometime very soon, the IATF should come out with a recommendation regarding the possible extension (or modification) of the enhanced community quarantine imposed on Luzon.

Until the decision is announced, we really do not know whether this will be more of the same or it will be some sort of “rolling” relaxation of restrictions. What is sure is that there will be a lot of pushing and pulling going on as the policy takes shape.

This we now know: it is a far easier decision to impose a lockdown than to lift it.

The main reason for that is that we still know very little about this pesky virus. It seems that most people do not generate enough antibodies to fight infection. South Korea reports that COVID-19 survivors can, apparently get infected.

Some people think this infection is just a bit more serious than the flu and that, at some point, “herd immunity” wIll set in and the virus will disappear. UK Prime Minister Boris Johnson tended toward that school of thought, did very little at the onset to fight the epidemic and eventually ended up in hospital himself. This theory about “herd immunity” is tenuous in the case of this particular virus.

The most dreadful possibility is that this particular virus could yet mutate, frustrating the tests and the experimental vaccines being developed against it. The more imminent possibility is that infections could subside only to resurge more strongly. We saw that in Singapore.

Two months ago, Donald Trump called the epidemic a “hoax.” Yesterday, the virus had killed over 41,000 Americans and Trump is paying dearly for his folly. His most avid supporters continue to peddle outrageously ignorant (and dangerous) videos claiming the epidemic is the handiwork of “Big Pharma.” When all this is over, Trump’s favorite Fox News ought to be indicted for murderously spreading all sorts of misinformation during this crisis.

Fortunately, in this country, there appears to be a very high degree of public consensus about the peril posed by this virus and the need to impose tough isolation policies. We do not have much of the right-wing anti-science constituencies that restrain effective response in the US.

Notwithstanding the huge economic costs of the lockdown, our people understand the basic scientific considerations driving the quarantine policies. Since “herd immunity” is at best a tenuous proposition, this pandemic could wipe out most of humanity if we do nothing and simply allow infections to run rampant.

No one in this country seriously accepts that health restrictions and economic survival are binary choices. It is clear to our people that economic prosperity is meaningless if there is hardly anyone left to enjoy it.

We all understand that infections will continue until a vaccine is found. It could take an intolerably long time for such a vaccine to be developed. Meanwhile, the restrictions on movement will have to be maintained to prevent a surge in infection that could overwhelm our health system. 

Nevertheless, we have to plot a safe way out of the tough lockdown that has been imposed. We could look at the progression to some sort of “new normal” in geographic terms, keeping restrictions on areas where infection rates remain high. We could also plot a road forward on an industry-by-industry basis, allowing economic activities where physical distancing is possible to resume operating.

One could imagine the sort of pressure our policymakers labor under. Ernie Pernia, in his mid-seventies, quit because of the personal stress the deliberations impose.

There are those, like Joey Salceda, who tend toward a hardline position putting public safety way ahead of economic exigency. On the other end of the spectrum, Joey Concepcion is pushing for the phased reopening of businesses after April 30, provided we have protocols for worker safety in place.

The official estimate for job losses is now 1.2 million. Given the size of our informal sector, however, the loss of livelihood is far greater than that.

All the hard-won gains we achieved after over two decades of bringing down our debt-to-GDP ratio are probably lost. With revenues expected to decline dramatically, government has no option but to finance recovery by way of heavy borrowing.

All the hard-won gains in bringing down poverty incidence to only 16 percent are probably also all lost. With much of the country on lockdown, expect the poverty rate to jump sharply in the second half of this year.

Job destruction is necessarily followed by demand destruction. Despite all the reforms, our economy remains consumption-led. Most of the small enterprises that provide the most jobs for Filipinos can only thrive if domestic demand is strong. Unemployment, a dramatic decrease in OFW remittances and widespread dislocation in the informal sector will all conspire to undermine consumer demand. In turn, this could force many small enterprises under.

Let us not even imagine that, as soon as the lockdown is lifted, investments will flow in like a welcome flood. The whole world in is recession. Consumer demand is collapsing everywhere. There is little incentive for investing in new capacity.

The next few months will be extremely harsh. We will try to rebuild our economy in the midst of a global recession approximating the dimensions of the Great Depression. We will have to focus on rebuilding the basics ahead of everything else.

The most basic of the basics is food production. For many years, this has actually been the weakest link of our economy. It must now be the strongest.

Our reopening will happen slowly, very carefully, holding the infection rate at bay.