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Why we are again the sick man of Asia

Reader, look at any recent analysis of the economic performance of countries in the time of COVID-19, the World Bank’s, for example—and you will find, unambiguously, that the “economic performance across countries continues to depend on (i) the efficiency with which the virus is contained; (ii) the ability to take advantage of the revival in international goods trade; and (iii) the capacity of governments to provide fiscal and monetary support.”

Notice that the first condition has to do with the physical/health situation—nothing to do with economics, but rather with the public health system of the country and its ability to manage COVID-19. In fact, the World Bank’s latest East Asia and the Pacific Economic Update suggests that the countries with relatively weak performance (ours was the weakest performance, if you will remember) were, among others, those “that relied more on prolonged restrictions on mobility rather than an effective test-based strategy.” It specifically mentions the Philippines as the case in point.

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Well, while we were the weakest performer in Southeast Asia in 2020, particularly among the Asean 5, it seems we will again have that dubious honor in 2021. The WB forecast for Philippine GDP growth in 2021 has been downgraded from 5.5 percent to 4.7 percent, this in spite of what should have been a “base effect”—that since the basis of comparison is quite low (the Philippines last year suffered the biggest drop in GDP since it was first measured), then the growth rates must be relatively larger this year. Well, it didn’t work that way—the economy suffered in the first quarter of this year, and for the fifth straight quarter, negative growth.

As a matter of fact, it looks like while the other countries will be achieving pre-pandemic levels in 2021 or early in 2022, we will not be “achieving” our 2019 level of GDP until the beginning of 2023. Yech.

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That is why that May 31 address to the nation of President Duterte, which focused on what the administration was doing with respect to COVID-19, was so important. The report of Health Secretary Francisco Duque III was very factual, and included the bad (the regions where COVID-19 was still raging) with the good. But the report of Gen. Carlito Galvez Jr., who heads the National Task Force Against COVID-19, was overly optimistic. His desire to assure his boss, the President, that the pandemic was under control overcame any compunctions his training should have provided him.

It was clear, from his slide show presentation, that he was making heroic assumptions and engaging in leaps of logic, which resulted in what looked like very poor arithmetic and/or selective choices of data. It may have impressed the President, but that is cold comfort for the country, knowing that how COVID-19 is managed will determine how the economy grows and develops.

And it does not look like the administration is managing the pandemic well. That is clear from the data shown to us on May 31 by Galvez. But it becomes even clearer when we look at all the data provided by websites such as Our World In Data: Coronavirus Pandemic with their daily-updated research and information. They have the data globally, by region, by country. You can choose countries and compare them whether on number of cases, deaths per million or per thousand, number of tests per million or per thousand, vaccines given daily, and hundred of other categories.

There is no way one can hide from the truth. The proof of the pudding is in the eating: We are performing badly economically, and a major reason is that we are handling the pandemic badly.

We cannot put all our eggs in one basket—vaccination—because that basket, as Galvez has weaved it, is full of holes. Do we have a plan B? Are our leaders even looking at the evidence showing that what they have been doing has led to why we are again the sick man of Asia? Just one example: Lockdowns and mobility restrictions, our favorite tool, is found to be associated with a lives vs. livelihoods trade-off. But testing (which we have never really used) is found to save both lives and livelihoods: “On average, every one thousand additional tests per positive case is associated with a one percentage point increase in output growth.”

Duh.

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TAGS: coronavirus pandemic, East Asia and the Pacific Economic Update, Rodrigo Duterte, sick man of Asia, world bank
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