Ateneo economists warn of possible recession

Economists at the Ateneo de Manila University (ADMU) warned of a possible economic recession this year, as the Luzon-wide quarantine measure against the spread of the coronavirus disease 2019 (COVID-19) threatens growth.

In a statement, the Ateneo Center for Economic Research and Development (ACERD) called on the government to ensure adequate health services and medical supplies, and provide social protection to the public.

"Enhanced community quarantine (ECQ) will put to a stop large segments of the economy, thereby choking both supply and demand, and threatening an economic recession for 2020," the statement read.

"At this time, the government is the only institution that is able to respond to the massive scale of effort required of the situation," it added.

Starting March 17, the entire Luzon was placed on enhanced community quarantine until April 13, 2020, restricting travel within the region in efforts to contain the spread of COVID-19.

Given this, the ACERD called on the government to set aside its economic targets -- reaching growth of 6%-7% -- for the meantime.

As of posting time, GMA News Online was still awaiting response from the government's economic managers on the matter.

The National Economic and Development Authority (NEDA) has since proposed a three-phased approach to counter the social and economic impact of COVID-19.

Phase 1 for health initiatives -- Phase 1A for clinical and medical response, Phase 1B for public health response, and Phase 1C for the short-term augmentation of health systems capacity.

This will then be followed by Phase 2 that involves rebuilding consumer and business confidence, and Phase 3 which covers a "new normal" state of economic activity more prepared for another possible pandemic.

Earlier, Albay Representative Joey Salceda said the Philippines could sink into economic recession had the government did not implement a community quarantine.

He admitted that while the COVID-19 situation will negatively affect the country's economy, the Philippines stands to lose more if there was no community quarantine.

"Ang virus na ito ay nagta-thrive through economic activity. So kailangan natin talaga na pigilan muna yung pagtakbo ng ekonomiya kaya nga may work stoppage, class suspension," said Salceda, chairperson of the House ways and means committee.

"Kung hindi natin ito gawin at nagkaroon ng mass community transmission o runaway infections, mas lalong mawawalan ng kumpiyansa sa loob ng ating sistema at lalong lalala, so baka magkaroon ng recession," he added.

Priorities

In the same statement, the ACERD said priority should be given to ensuring adequate health services, provide social protection to the people, and address the economic and social costs of the ECQ.

Among the initiatives proposed by the ACERD are doubling the unconditional cash transfers (UCT) to P73 billion from P36.5 billion, to provide income support for those not part of the Pantawid Pamilyang Pilipino Program (4Ps).

They also urged the government to hire logistics and movers -- motorcycle riders, taxis, and TNVS -- to move food, medicines, and frontliners and hospital staff.

"The negative impact of the enhanced community quarantine will be substantial considering that significant segments of the economy are going to stop," the group said. — RSJ/AOL, GMA News