Recession

By Art Jimenez

 

You all know by now that COVID-19 has pushed our national economy into recession in the first half of this year. Recession takes hold when a country’s gross domestic product (GDP) experiences negative growth for two consecutive quarters. On the other hand, GDP is the total value of all goods and services produced in the country within a period, usually one year.

Data from the Philippine Statistics Authority (PSA) showed that our (GDP) contracted by a tiny -0.7 or less than one percent in the first quarter (i.e., January to March). This coincided with the still then half-asleep COVID-19, which originated from Wuhan, China.

By the next three months (April to June), the pandemic has practically gone amuck recognizing no land nor sea borders. Correspondingly, the PSA just recently revealed that our GDP has shrunk by 16.5 percent, the worst in our economic history.

This recession comes on the heels of continued economic growth that could have sustained its rise were it not for the incurable virus that has been inflicted on us. The Philippine recession is shown in the jaw-dropping illustration below.

This dramatic decline could be likened to a young man getting taller each year only to be hammered on the head and reduced to a runt. And similar to the economy, this runt of a man has little or no chance of regaining his original height, much less grow taller.

Looking back.  In retrospect, COVID-19 was visited on us by China from where the virulent virus emanated supposedly from an exotic animals market in Wuhan, Hubei. To arrest its spread, the Chinese authorities lost no time in locking down Wuhan. But intentional or not, government allowed Wuhanese to travel abroad and to accept foreign visitors to Wuhan. Note that our first Covid patient was from Wuhan. Thailand had the same experience. Soon, to and from Wuhan travel involved Europeans, Africans (mainly from Egypt), US, and everywhere else. So COVID-19 cut its wide swath.

Then local transmission took over. And the rest is… well, you know the rest.

President Duterte has signed into law on January 6 the government’s 2020 national budget of P4.1 trillion when COVID-19 struck in January. Nowhere in that budget was any appropriation for fighting COVID-19. Why? The DOH reported the first case of COVID-19 in our country on January 30, 2020. We also have the “distinction” of registering the first COVID-19 death outside China on February 1, 2020.

When COVID-19 worsened from an epidemic to a pandemic, our national budget has gone haywire prompting Malacañan to propose a law, Bayanihan to Heal as One Act, that would authorize the president to realign funds from the national budget’s discontinued programs, activities, and projects, special purpose funds, and income from government-owned or –controlled corporations (GOCCs). This entailed hundreds of billions of pesos. Because of the enormity of the pandemic and the havoc it wreaked on our people and their economic activities, the government had to go deeper in debt, but ever watchful that loans should not exceed international benchmarks on borrowings.

To stem the tide of the pandemic, Duterte at the behest of the Inter-Agency Task Force (IATF) for the Management of Emerging Infectious Diseases imposed continuing two-week community quarantine of all modes starting the Ides of March to this day. This somewhat gives us the rather uncomplimentary distinction of having the longest community quarantine (call it lockdown) in the world.

And yet, COVID-19 cases continue their ascent.

To be Continued