AS the hours and days pass, the measures adopted by the government to mitigate the worst of the Covid-19 pandemic become clearer and maybe even easier to live with. That in no way means that this has been a complete success or that mistakes were not made. Some people believe that they have all the answers as if they have been discussing the issue perhaps with the “Communion of Saints” since before the virus struck. For the rest of us mere mortals—including government policy-makers—we have to adjust. Even with the most well thought-out and “comprehensive” plan during conditions that are as fluid as we are experiencing, there is going to be some “make it up as we go along” or, more generously, trial and error.
However, moving and looking forward there must be plans made that are as complete as possible and that are realistic. As I have said before, the health aspects of the Covid-19 are serious, but the resulting economic effects are critical. Short-term relief from the financial problems is already being put in place, particularly by the private sector. These include moratoriums and extensions of debt and current bills payments.
Many local governments are rolling out genuine direct monetary assistance to those that are most vulnerable from income disruption. The private sector is stepping up also, like villages making sure their security personnel and other staff have food and other essentials not only while on duty but also for their families.
While the frontline government officials are engaged with immediate concerns, there had better be a back room filled with both public and private sector people discussing the future. While this is not a particular criticism, the Philippine Stock Exchange did not seem to have any emergency plan in place if the critical support staff of the brokerage firms were unable to come to work and do their jobs. That may not be the case but the public statements from the PSE would indicate that they were forced to the extraordinary measure of closing the stock market. It is probable that while the “exchange” might be able to function without warm bodies, many if not all individual trading participants could not. It would be more honest to both local and especially foreign investors to say, “We may for the foreseeable future be forced from time to time to operate with these serious constraints.”
That will not make any investor happy but the devil you know is better than the devil you do not know. The same is particularly true for all other parts of the Philippine financial system, from bank clearing to foreign currency transactions. It is one thing if the physical infrastructure is severely damaged, such as from an earthquake or typhoon. But to say the system is down because the guy with the key to the front door couldn’t come to work is completely unacceptable.
Since the world at least partly operates and can function even with limits electronically, there is no reason why some if not all of the electronic financial infrastructure could be transferred to physical locations around the country in the event of a future situation like what has hit Metro Manila. We will survive Covid-19. But this will not be the last time the nation will be confronted with a similar situation, and we must be prepared. This is the opportunity to break the “disaster” down into smaller and more manageable pieces from transportation to food relief, health care, and business.
E-mail me at mangun@gmail.com. Visit my web site at www.mangunonmarkets.com. Follow me on Twitter @mangunonmarkets. PSE stock-market information and technical analysis tools provided by the COL Financial Group Inc.