‘Virus beyond control to cost 4.13% of GDP’

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LIMITING economic activity in Luzon in the desperate race to stop the spread of Covid-19 would result in significant losses for the economy, a senior lawmaker and economist said, but weighed this against a far bigger estimate of losses should the chain of transmission get out of control.

In an aide memoire submitted to the leadership of House of Representatives, Albay Rep. Joey Sarte Salceda, said a mass transmission of Covid-19 would cost the economy even more significantly—at least 4.13 percent of the country’s GDP.

The vice chairman of the House Committee on Economic Affairs on Tuesday said this is significantly higher than the lockdown’s impact on the country’s annual GDP, estimated at 2.95 percent. Luzon accounts for around 71.9 percent of the GDP. “No lockdown, mass transmission will kill 4.13 percent of GDP. A lockdown will decrease GDP by only 2.95 percent. It saves lives and saves the economy,” Salceda said.

He said the lockdown in Luzon would also result in job losses, revenue losses for local and national governments Salceda said the seasonal job losses, primarily from the informal sector, are estimated at 251,000 jobs while losses on structural jobs will be at 85,000.

He said national internal revenue tax and local business tax losses from these jobs are expected to reach P68 billion.


Salceda said the enhanced quarantine imposed by the national government on Luzon will deny the novel coronavirus ample room to spread and help ensure that the country’s health system is not overwhelmed by cases.

“Obey the lockdown, it will save 1,565 lives. It could be yours or your loved ones,” he said.

The enhanced quarantine, which President Duterte has also called a lockdown, was declared Monday night, and will be in effect until April 13, 2020. Most modes of movement have been restricted, including domestic travel and mass transport.

The public has also been advised to remain at home except for essential activities like buying food and basic supplies. Local governments were mandated by the President to be on top of the local situation and provide for the needs of their constituents.

“My office has done the numbers. The lockdown will prevent up to 26,500 more infections by May 4, when Congress’s session resumes. President Duterte’s decision will be game-changing and life-saving. By the decision, the President has protected thousands of lives and Filipino families,” Salceda said.

“Congress is prepared to assist in authorizing and operationalizing mitigating measures to help our countrymen in this fight. I myself am proposing a P199-billion package of measures to assist Filipino families,” Salceda said, explaining his Filipino Families First Coronavirus Response bill.

“The people need to understand how crucial their cooperation is. The President is right to say that we are all soldiers in this fight, so we must obey the chain of command—in this case, instructions from the President and public health authorities. This is what worked in China, which was able to contain the disease early enough, despite the massive number,” he said.

Image credits: Bernard Testa


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