A Temporary Setback
This is no time to panic. Rather, this is the time to look back at our economic gains in the fourth quarter and preserve these as we slog through this latest pandemic wave.
The Omicron variant by its nature is more virulent than the Delta strain of the Covid-19 as shown by the increasing number of daily cases recorded in the Philippines. But it is proving to be less deadly than the Delta variant so far, and I believe the number of cases will peak in January as our health authorities declared.
Combatting the Omicron variant will require several health measures. First and foremost, we should keep the granular lockdowns that we instituted in the third and fourth quarters of 2021 that effectively contained the virus spread. The widespread lockdowns that we implemented in the past failed to stop rising infections. They, instead, shut down a big part of the economy and took away millions of jobs.
Our health measures should start with the unvaccinated individuals, who are the major source of the infection. I agree with the stern warning of President Rodrigo Duterte against unvaccinated individuals. Now is the time to penalize those who are refusing vaccination by restricting their mobility and reward those who have received vaccine doses.
Health authorities have every right to confine those who have not received their jabs in their homes as a temporary measure, and as the latest pandemic wave rages. We may see fewer people in malls and restaurants, which is naturally bad for the economy. But this is just a temporary setback. As soon as Covid-19 cases drop and more people are vaccinated, we can shift back to Alert Level 2 from the current Alert Level 3 and reopen the economy again at a bigger scale.
The easing of restrictions in the fourth quarter, especially toward the last two months of 2021, has perked up the economy. Filipinos troop to the malls and other shopping centers in revenge spending. Small businesses thrived and were able to re-hire their staff that earlier lost their jobs due to the pandemic.
Many industries, especially dining venues and fast-food restaurants, were able to operate at much higher capacity, while some sectors hit hard since the pandemic started, like hotels and other tourism establishments, were allowed to operate again.
The unemployment rate, as a result, dropped from 7.4 percent in October to 6.5 percent in November, the lowest level since the Covid-19 pandemic struck the Philippines. As the economy reopened and returned to greater normalcy, more people reclaimed their jobs and an increasing number of small enterprises restarted their operations.
Per the report of the Philippine Statistics Authority last week, the November unemployment rate was the lowest since January 2021. The second lowest was in July 2021 at 6.9 percent, followed by 7.1 percent in March 2021 at 7.1 percent. The unemployment rate was highest in September 2021 at 8.9 percent, or during the peak of the Delta variant.
The November data showed the number of unemployed fell to 3.16 million Filipinos from 3.50 million in October, or an additional workforce of 345,000 from the preceding month.
Keeping Covid-19 at bay and easing the mobility restrictions are critical to reopening further the economy. The current restrictions under Alert Level 3, hopefully, will be temporary. The Philippine economy, however, will take some hit.
Per the estimate of the interagency Development Budget Coordination Committee, the shift to Alert Level 3 in the National Capital Region and nearby provinces over rising Covid-19 cases will result in a gross value added loss of about P3 billion a week.
The lost business opportunities and output from mobility restrictions are the bitter pills that we have to take under Alert Level 3. I believe, though, that we are more well prepared this time to manage the current spike, given our increased hospital capacity, the availability of vaccines and funding for booster shots.
The Philippines has administered 110.9 million vaccine doses as of January 5 this year, comprising of 57.3 million in first doses, 51.1 million in second or complete doses, and 2.5 million in booster shots.
Thus, I believe we will overcome the Omicron variant in due time as the Philippines expands further the vaccination coverage. Neutralizing this latest surge will help preserve our recent economic gains.