What’s in store for commerce after lockdown

First of two parts

The government has finally eased the restrictions it imposed during what could be the world’s longest lockdown meant to impede the Covid-19 spread which has placed the world in a virtual standstill.

And in the usual ballyhoo for the government’s stopgap and shortsighted Covid-19 pandemic plans, the easing of restrictions, or the so-called general community quarantine (GCQ), was met with confusion and burnt nerves, especially for commuting employees who were told they could go back to work, but were not provided with adequate mass transportation modes to do so.

All through the lockdown period, the police-led campaign harshly constrained people and commerce movement under the ambit of emergency powers granted to President Duterte. Those special powers were supposed to enable the government to adequately and swiftly respond to any emergency that would mushroom from the deadly virus.

Expectedly, after more than three months of inactivity, the economy has taken a heavy toll, even as the number of virus-infected individuals steadily increased. I have refrained from monitoring the data being churned out by the Department of Health (DOH) after the government itself admitted that it has been feeding the public with erroneous information. I don’t relish assigning flesh and bones to cold statistics numerically represented in Excel spreadsheets.

I also beg to differ with some people in government and the private sector who postulate that the solution to this crisis is one of health-versus-commerce. We simply cannot condense the pandemic into a zero-sum-game. Both public health and national economy must be conserved—just like what Vietnam intended and succeeded to do—or face the dire consequence of losing both, which is unfortunately the situation the country is now in.

At the onset of the pandemic, our leaders failed to act decisively and judiciously in closing our borders. Up to now, proper, efficient, and effective contact tracing and mass testing have not been done. These two resolute actions were the reasons Vietnam is coming out of this pandemic virtually unscathed.

In the Philippines, what transpired has been the almost daily arrest and detention of thousands of lockdown and curfew violators for simple disobedience and breach of the Bayanihan to Heal as One (BAHO) Act. Online critics of the president have also been apprehended without a warrant for purported violation of the Revised Penal Code and other disciplinary laws, while the police has been soft on the violators of the BAHO Act committed by state actors.

So what does the new normal hold for all of us? Let us consider some worrisome developments that we know so far.

Recession is seen hovering as the national economy is seen contracting by 2 percent to 3.4 percent this year—an economic dive unseen since the Marcos regime. The Development Budget Coordination Committee (DBCC) said on May 13 that the pandemic’s impact on the economy could reach P2 trillion or around 9.4 percent of gross domestic product (GDP). The Philippines expects to go into recession, as the economy contracts due to the coronavirus outbreak and lockdowns
associated with it.

Finance Secretary Carlos Dominguez III estimated GDP growth at zero percent to 1 percent. This estimate is grimmer than the Asian Development Bank’s outlook for the Philippines which expected a 2 percent full-year GDP growth. The World Bank’s forecast was even hopeful at 3 percent.

Government borrowings to finance Covid-19 response have driven the country’s debt through the roof, pushing the total to a new high of P8.6 trillion in April alone. At least two-thirds of our total debt, some P5.9 trillion as of April, were from domestic sources. It was up by nearly 1 percent month-on-month and 12.6 percent year-on-year, according to the data released by the Bureau of the Treasury on June 2.

Flag carrier Philippine Airlines may be forced to lay off more employees, depending on how its recovery goes once commercial flights are allowed to resume. PAL President and COO Gilbert Santa Maria in an ANC interview said revenue losses of the company are nearing $1 billion due to flight cancellations from the pandemic.

Petron Corp. incurred a net loss of P4.9 billion in the first quarter of 2020, a downturn from the P1.3 billion in net income recorded in the same period last year, as the spread of the virus had dampened demand. Petron suffered significant inventory losses during the period, as oil prices in the world market plunged and demand in both local and international markets contracted.

Everybody now talks about Covid-19 bringing about a new normal where nothing will be as it was before. But the term “new normal” has been used in business and economics before to describe the aftermath of the financial crisis of 2007-2008 and the 2008–2012 global recession.

A case study e-mailed to me by a group of students from the De La Salle University offers an interesting solution. The e-mail was signed by its authors Andrada Santino Cuello, Katrin Angela G. Lagman, Alexandra Noelle B. Leung, Ysa Lusica, Bea Santiago, Raphael See, Lisette and their professor, Jun Barrameda.

The case study emphasizes that under the new normal, public- and private-sector policies and systems must be redesigned to benefit all stakeholders. Employee welfare and continuous growth of private businesses, even those which may remain closed, must be ensured. Schools and universities will have to partner with eLearning vendors for their students. Many online platforms that provide virtual learning solutions will most likely thrive in the new normal. One of these platforms, their study points out, is Lyon PH, an online and on-demand platform that caters to young professionals. Lyon PH hopes to promote a knowledge-driven society through technology by offering their customers with an engaging and universally accessible knowledge base.

The abrupt escalation of the pandemic has brought about chaos and shifted the way the world usually functions. It has put a complete halt to daily life as we know it. The world we now live in requires our government officials and private-sector management to construct policies and programs that will not only sustain the economy, but more importantly uphold the security and safety of all Filipinos.

(To be continued)

For comments and suggestions, e-mail me at [email protected]

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