Postponing the tough part

Tuesday saw the Great Deflation, after a metropolis eagerly awaiting news of its fate found itself at the end of the President’s recorded message with no word on what would happen after May 15. It took “Hairy” Roque’s noontime presser for some light to be shed: As this corner suggested, essentially NCR will remain on lockdown for the rest of the month. Over the weekend, a grocery attendant had it all figured out: “You see,” he said, pointing to his government-issued ID, “these are valid until the end of June so that’s how long I think they’ve decided lockdown will last.”As with every Great Deflation, there was a period of Great Speculation: Had the President decided it’s not for him to deliver bad news (that’s what spokespersons are for)? Had he made a decision that the Cabinet didn’t like, so they postponed announcing it in the hope he could be convinced to change his mind? Or hadn’t he made up his mind, which meant the Cabinet wanted more time to help convince him to decide things?

As it turned out, there was something for everyone. Some places (less populated) can shift from total to less-strict quarantine; others will remain in tight quarantine, but panicking businessmen (and workers) can partially breathe easier as a partial return to work for some factories will now be allowed (this is “modified enhanced community quarantine” for NCR for the rest of May, replacing the previous enhanced community quarantine, for example). What’s the difference? Look at a picture of identical twins and try to spot the difference.

I was told that a recent McKinsey/Asia Society webinar on our economy had a pessimistic outlook: Even if ECQ were lifted mid-May (which it hasn’t), our economy will still contract by 0.9 percent. If quarantine lasts until June or longer (which it likely will), then the economy will contract 7.7 percent. These are numbers not seen since World War II. So it’s a negative outlook this year even in the best scenario. On a related note, official numbers recently released shows a first quarter year-on-year contraction, the first since the 1998 financial crisis. Some interpret that as the hit the economy took from Taal; but if this were so, it suggests the COVID-19 effect will be greater. According to the webinar, Philippine economic recovery, overall, will take 4-5 years; some sectors could linger on in a damaged state for 10 years.

I’ve heard or read similar discussions elsewhere, where there are generally two frames of reference to describe the economic devastation we’re experiencing at home. (Globally, the frame of reference is the Great Depression for the United States, where current unemployment numbers exceed that for the 1929-1941 era, and the 2008 global meltdown elsewhere, where a recent Guardian article by Adam Tooze described how the global economy nearly came to a halt because of COVID-19, and prevented only by “intervention on an unprecedented scale.”) For the non-economics-minded, it means you’d have to be as old as F. Sionil Jose, or in your 90s, to have experienced World-War-II-level economic disruption; or be a Baby Boomer like the President and his overwhelmingly Boomer Cabinet, to have experienced the Marcos-era economic collapse of the country, to have an idea of how damaged our economy now is.

For its part, ahead of the President’s stream-of-consciousness remarks, the finance secretary laid out his response to the economic devastation: more of the same. There would be more Build, Build, Build, he said, though of course ahead of COVID-19, infrastructure ambitions had already been reduced, so that only projects that could be finished within the current administration’s term would still continue (by their modest scope and scale, such projects can’t revive the economy). He mentioned that 1.2 to 1.5 million jobs have been lost, though DOLE previously estimated it at 2.3 million “displaced.” He also pointed to tax reform (CITIRA) before June 3 to attract investments (when investors or investment-minded folks have expressed, privately at least, a lack of enthusiasm for the proposed law); and the (possible, maybe, why not?) hiring of “contact tracers” for the investigation of virus outbreaks.

Maybe fix our counting first? The UP Resilience Institute compared the releases of official data on April 24 and 25 and discovered that 45 cases changed sex from male to female or vice-versa; 75 patients became older or younger overnight; 516 cases were reclassified as belonging to another city or an imaginary city (district or barangay; for example in Manila); and one patient dead on April 24 was no longer dead the next day.

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