Chua: Nationwide MGCQ to resume 95% of economy

MANILA, Philippines — Up to 95 percent of the economy would resume jobs and provide income once the entire Philippines is placed under a uniform and the least stringent of its Covid-19 quarantine levels, which the government’s chief economist has been pushing amid a prolonged pandemic and the recession it wrought.

Acting Socioeconomic Planning Secretary Karl Kendrick Chua said in a text message Sunday that imposing modified general community quarantine (MGCQ) nationwide would revert nearly all of supply-side economic activities, which meant producing more goods and providing consumers a wider array of services.

If President Duterte approves this proposal pushed by the economic team to recover from the pandemic-induced recession, the nationwide MGCQ will be the closest to firms and industries’ pre-pandemic production levels before the government stopped 75 percent of the economy at the onset of the longest and most stringent Covid-19 lockdown in the region.

As a result of the enhanced community quarantine (ECQ) imposed from mid-March to May last year, the Philippines fell into its first recession or two straight quarters of year-on-year drop in gross domestic product (GDP) since 1991. And as most of the country, especially the business and financial hub Metro Manila, remained under strict quarantine, the recession lasted for all four quarters of 2020, shrinking GDP by 9.5 percent—the worst post-war outturn.

But for Chua, who heads the state planning agency National Economic and Development Authority (Neda), further opening up the production side of the economy would not be enough to jumpstart GDP growth.

“It depends, of course, if there is enough transportation and demand-side factors—particularly age relaxation—to support this,” Chua said, referring to their proposal to allow persons aged five to 70 to dine out or shop in malls.

Current restrictions allowed only those between 15 and 65 years old to go out of their homes.

Chua had said children were a major consumption driver pre-pandemic as most families dined out or shopped with kids in tow.

“That is why our proposal is a package: MCGQ, more public transportation, and lower age allowed to go out,” Chua said.

Citing Neda estimates, Chua said that at present, the three sectors with the most significant restrictions were education, which had zero face-to-face classes; restaurants, which only had 50 percent of capacity allowed; and transportation, which could service only 50-75 percent of demand.

Chua had already conceded that GDP would likely again contract in the first quarter of 2021 as a result of the “slow” start in reopening the economy.

As such, Chua told President Rodrigo Duterte last week that the least stringent MGCQ—still subject to minimum health standards to avoid spreading the deadly coronavirus—would address prevailing high incidence of hunger and joblessness among households in areas where many economic activities were still prohibited.

On the other hand, Chua had pointed to surveys showing that hunger and unemployment dropped quickly especially in areas outside Metro Manila which were already under MGCQ towards the end of 2020.

Chua had said that since surveys showed over nine out of every 10 Filipinos adhered to the prescribed measures like wearing face masks and shields, frequent handwashing, as well as social distancing, the spread of Covid-19 would be manageable despite risks lurking from the recently emerged more contagious virus variants.

Duterte is expected to make a decision on Chua’s recommendation this week.

/MUF