Mitigating long-term country risk | Inquirer Business
MAPping the Future

Mitigating long-term country risk

Our situation’s untenable. Thoughtless, toxic partisan politics is occupying strategic space in mass and social media at a time when so many top priorities are crying for attention. Let’s examine four external risks threatening our national wellbeing:

First, the Delta variant sweeping the world is here and has forced the return of strict lockdowns. It’s more infectious than the original Alpha variant. Every age group is now at risk. Babies and children are appearing in hospital reports, unlike Alpha that mainly affected senior citizens. Nations that were loosening restrictions and opening their economies are now mandating all required safety protocols. Previous assumptions are flying out the window. For one, no one is immune from infection even after two jabs.



Evidence is mounting that fully vaccinated people are capable of infecting others. Recent reports from here and abroad show that almost all of those hospitalized, and those who died, were unvaccinated. There are alarming forecasts of more virulent variants to come. These reports are softening the resistance to vaccines, but it’s also frustrating those who now want to be vaccinated, but can’t, because of supply issues. Close relatives, friends and acquaintances of mine have survived, but some didn’t. That really sucks.

Real vaccines immunize for life. The anti-COVID “vaccines” being marketed today are still experimental. Their potency is allegedly limited in duration (eight months or so?). Which brands are effective against Delta? No one knows yet. One thing for sure—the virus is clearly in control. Many of its aspects are still unknown. We need to learn from countries with better overall results. Data integrity, complete public information, a robust health-care system at all levels, sensible decisions and synchronicity are some of those lessons.


Waves of infections and lockdowns will break the global economy into pieces in due time. A global depression is staring us in the face. The pandemic has infected over 203 million and caused 4.3 million deaths worldwide; and over 1.7 million and 30,000 deaths in the Philippines. Yet, some aren’t alarmed, claiming that many more people die worldwide from far more lethal causes. That attitude fans strong resistance to vaccination compounded by suspicions of a big pharma-media-global elite conspiracy; disinformation, and; experts tripping over each other.

Supply deficit

The supply deficit is forcing many Filipinos to seek alternative protection for their survival. Ivermectin is a popular, affordable and accessible prophylactic recommended by medical quarters in various parts of the world. On account of rising fears caused by Delta, Ivermectin will likely retain its “go-to” status. In any case, the government must accelerate its sourcing of effective vaccines to protect EVERY Filipino at the soonest time possible. And “whole of society” could do much better in the cooperation department. It’s all about saving lives.

Second, the sooner we get that done, the earlier we can reopen the economy without getting sloppy on safety protocols. The deep recession we’re encountering will leave lasting scars, e.g., lower investments; human capital erosion from lost work and schooling; and fragmentation of global trade and supply linkages. Our country’s report card needs improvement. Decades of negligence and self-gratification have cut deeply in our ability to manage and overcome crises. It’s a lesson that we keep ignoring or sails past our heads.

It’s hard to predict when we can get out of this. While the second quarter of 2021 showed remarkable turnaround results, it came from a low base. Will it continue given Delta’s surge? Every economic indicator has gone deep south since last year. Gross domestic product (GDP), net incomes, revenue collections and remittances have dropped; debt and more borrowings are up. Money is obviously in short supply. One sensible move is to stop runaway malfeasance and misfeasance cold turkey. That needs a long-term ruthless strategy and plans to plug the leaks (assume 20 percent of the annual budget).

Reduction targets

I don’t think we have one with clear annual reduction targets and how to re-channel recovered funds. Look at national security. Our national interests require the backing of a reliable defense and homeland security forces. Yet, average spending is only around 1 percent of GDP. As we’re on catch-up mode, the average should be 3 percent of GDP. “Whole-of-government” continues to fail in this. Imagine our defense and homeland security posture today had we started getting serious two decades ago.

Third, war drums are beating louder in Eastern Europe, the Middle East and the Indo-Pacific. Escalating military exercises in the South China Sea keep raising tensions and could trigger an accidental clash. We’re caught in between the United States and China. Because we occupy strategic real estate, we must maintain the balance of power between them, with the MDT-VFA on one hand, and our diplomatic policy of “friendship to all” on the other.

Worst case

Should war break out among the great and middle powers, we’ll have to fend for ourselves. While working for peace, we must prepare for the worst case. The world is unstable and the future’s unpredictable. The Middle East, Eastern Europe and the Indo-Pacific are global hotspots. Imagine open warfare between Israel and Iran. The consequences of a global oil crisis, on top of the pandemic and current global recession, will cause the world to tailspin. Likewise, if an accidental conflict in the South China Sea morphs into a world war.


Fourth, as if all that aren’t enough, yesterday’s climate change predictions continue to pan out today. Massive ice melts aren’t only raising sea levels but are also giving rise to the prospect of releasing trapped gasses, viruses and bacteria. Hotter heat waves, drought and wildfires in many parts of the world are contrasted by stronger typhoons, prolonged heavy rains, slides and floods in other parts. Those scientific predictions have been upheld by actual phenomena, yet mankind has not done enough to save itself from a steadily advancing extinction level event.

For us, that means less land mass, food security crisis and socioeconomic dislocations in varying degrees throughout the archipelago. Surviving the gathering storm requires that we set high bars of performance to lift our country to safety. We need to think, plan, train and fight like our Olympians to join the ranks of heroic nations. INQ

This article reflects the personal opinion of the author and does not reflect the official stand of the Management Association of the Philippines or MAP. The author is member of the MAP, chair of Philippine Council for Foreign Relations, vice chair of Pepsi-Cola Products Philippines Inc. and sits on the boards of other companies as independent director.

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TAGS: Business, GDP, lockdowns
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