MANILA, Philippines—The shift to stricter alert level 3 restrictions amid a surge in COVID-19 cases across areas accounting for about half of the economy will cost P3 billion in output losses per week, President Rodrigo Duterte’s economic managers said on Friday (Jan. 7).
The Department of Finance (DOF) may also consider foreign borrowings to augment funds for allowances of frontline health workers amid the prolonged fight against the pandemic, Finance Secretary Carlos Dominguez III said separately.
The estimated weekly loss in gross value added (GVA) came on the back of tighter virus curbs imposed in Metro Manila and neighboring provinces of Bulacan, Cavite, Laguna and Rizal until Jan. 15, the Cabinet-level Development Budget Coordination Committee (DBCC) said in a statement.
The DBCC, which groups the Department of Budget and Management (DBM), the DOF, the National Economic and Development Authority (Neda), and the Office of the President (OP), just last December expressed confidence that the country would move to the lowest alert level 1 in January 2022.
But as COVID-19 cases surged following the Christmas holidays, Metro Manila and the four surrounding provinces instead moved to a higher alert level from level 2 in December 2021.
A shift to the least stringent of all restrictions would have reopened more productive sectors, and help achieve the government’s targeted faster economic growth of 7 to 9 percent this year following last year’s target to expand gross domestic product (GDP) by 5 to 5.5 percent.
“While this may delay our goal of shifting to alert level 1, we believe that this is a temporary setback and is a necessary adjustment in view of the new COVID-19 variant,” the DBCC said, referring to the Omicron variant.
“We are in a better position to manage possible spikes — we have enough vaccines and funding for booster shots; we have increased hospital capacity; we now resort to granular lockdowns; and, from all indications, the Omicron variant results in less severe cases, especially to those who are fully vaccinated,” the DBCC said.
The DBCC said 110.9 million vaccine doses had been administered as of Jan. 5, 2022. It said about 51.1 million Filipinos were already fully vaccinated. To date, 57.3 million received their first of two doses on top of 2.5 million booster doses for priority, most vulnerable sectors, the DBCC said.
“With the recent signing of the fiscal year 2022 General Appropriations Act which is the country’s main fiscal stimulus, and was crafted with COVID-19 response and recovery in mind, we expect to accelerate government spending and help the economy bounce back,” the DBCC said, referring to this year’s record P5.02-trillion budget.
Asked if the government may consider borrowing from multilateral banks to fund Duterte’s plan to raise the special risk allowance (SRA) for health workers in the thick of the fight against COVID-19, Dominguez replied to reporters: “It depends on the total amount.”
Pressed further if selling government assets may also finance a bigger SRA, Dominguez replied: “No.”
The DBCC said that this year’s budget “will prioritize programs, activities and projects that seek to sustain the administration’s efforts to effectively respond to the challenges brought about by the pandemic.”
Also, the DBCC said the extension of the P4.51-trillion 2021 budget’s validity until Dec. 31, 2022, would be “an added fiscal stimulus that will support national government agencies and local government units (LGUs) in continuing to accelerate the implementation of COVID-19 recovery measures.”
“The approved 2022 national budget and the extension of the 2021 GAA will help strengthen the country’s resilience against the emergence of new variants and future economic shocks,” the DBCC said.
“The economic prospects for 2022 remain promising, but we urge everyone to play their part in the recovery by getting vaccinated, availing of booster shots, and strictly adhering to the minimum public health standards to help support the gradual and safe reopening of the economy,” the DBCC added.