Life After Lockdown: Return of mobility to aid industries' recovery, but road still rocky for struggling sectors
Life After Lockdown: Return of mobility to aid industries' recovery, but road still rocky for struggling sectors
Prinz Magtulis (Philstar.com) - May 26, 2020 - 8:48am

Philstar.com's Life After Lockdown is a compendium of references on Filipinos' shift to a new normalcy during a coronavirus pandemic.

Unlikely to recoup much of their losses in a post-lockdown period are the same sectors severely affected under the enhanced community quarantine especially in the capital region.

  • The semiconductor industry, which accounts for 41% of the country’s goods exports last year, is expected to suffer from low demand abroad. Semiconductors produced in the Philippines mainly serve as raw materials for final products produced abroad, particularly in China. The lack of economic activity this year means low demand for semiconductors.
     
  • Difficulties of the property sector are unlikely to abate even after the lockdown. Real estate sales remain prohibited under general community quarantine (GCQ). In end-March, consultants at Colliers said around a fifth of new condominiums for sale would end up empty in Metro Manila. Office leases would also likely drop.
     
  • Banks, albeit healthy, may see some drop in earnings attributed to 1. Higher withdrawals from automated teller machines and 2. Setting aside of more buffer funds by some lenders like Bank of the Philippine Islands and Metropolitan Bank and Trust Co. to cover for the potential rise in unpaid loans during the quarantine.
     
  • The tourism industry will not yet see steady recovery as travel barriers remain. Similarly affected are tourism-related sectors such as hotels and airlines, which will mostly remain grounded under GCQ, save for some cargo flights.

Once the enhanced community quarantine (ECQ) is lifted, industries like construction, retail and dollar-earner business process outsourcing will begin to benefit from eased restrictions.

  • The resumption of “Build, Build, Build” infrastructure programs under GCQ would facilitate construction activity although “social distancing will be the norm” even for contractors, said Ibarra Paulino, executive director of Philippine Constructors Association in a text message.
     
  • Roadworks will be prioritized as well as discontinued excavation works, Paulino added.
     
  • Retail will benefit from mall reopenings. Some non-essential services such as beauty and well-being (salons and barbershops) will also resume operations. The food and beverage industries, which in March suffered from checkpoint roadblocks and a liquor ban, will gain from more restaurants that offer food delivery services.
     
  • The business process outsourcing sector expects some recovery post-ECQ. Rey Untal, president of the IT-Business Process Association of the Philippines, had said in a statement a “projected influx of returning workers” to BPO offices is seen once the lockdown is lifted, especially with public transport available in a limited scale.
     
  • Oil firms will earn from demand brought by the reopening of public transport and workers reporting to their offices. However, any income would be offset by costs from higher oil import taxes imposed by President Duterte to generate more funds for coronavirus response.
     
  • Some revenues and employment would come from the gaming sector through the continuation of Philippine offshore gaming operators or POGOs. According to data from the Philippine Amusement and Gaming Corp., some 31,000 Filipino workers in the industry may go back to work. 

When will struggling industries recover? Recovery for most economic sectors would depend on how companies adopt to movement restrictions that are likely to remain in place for a while.

  • Next year is a good target for some recovery since some companies have already slashed planned investments this year. Conglomerates like Ayala Corp. and Aboitiz Equity Ventures lowered capital expenditures
     
  • Telcos PLDT Inc. and Globe Telecom Inc. said they would “re-evaluate” their record-high capex this year, although for new player Dito Telecommunity, Information and Communications Technology Undersecretary Eliseo Rio said, before he stepped down, that the company remained convinced it is on track for its rollout in July. Power distributor Manila Electric Co. is also open to some capex downscaling.
     
  • Any underperformance from large companies would likely worsen the country’s economic performance, which in the first quarter slumped to 0.2% year-on-year.

 

COVID-19 GENERAL COMMUNITY QUARANTINE LIFE AFTER LOCKDOWN METRO MANILA LOCKDOWN NOVEL CORONAVIRUS
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