Some winners from the COVID-19 lockdown
CROSSROADS (Toward Philippine Economic and Social Progress) - Gerardo P. Sicat (The Philippine Star) - June 3, 2020 - 12:00am

(Continued from the series on the COVID-19 recession)

The previous column discussed the direct and indirect consequences of the coronavirus diseases 2019 or COVID-19 recession.

It is, of course, not true that all consequences are about losers and losses. There are some winners too.

‘Examples of winners.’ It is not necessarily the case that somebody’s loss is another’s gain. In fact, there are situations of losses for both, but some losers lose less and others lose more.

Take the food business for example. Food is a necessity, but the lockdown had constricted demand. Some opportunities opened for changing the manner of presentation and business model.

For instance, some businesses thrived even better by using their internet knowledge to branch out into food preparation for delivery to clients and by introducing innovative packaging and payment systems.

‘Toward cashless transactions.’ More generally, banks and traditional industries that have invested in relevant technological upgrading are immediate winners. The internet has provided a great means of presenting product choices and catalogues. Also, a payments system revolution through digital platforms and banking has been on-going for some time now.

But the COVID-19 lockdown has accelerated the relevance of these innovations to quicken product and service awareness and facilitate transactions, making them more fluid and almost instant. If we have a much bigger telecommunication infrastructure in place, the move toward a cashless society will be swifter.

The government and monetary authorities needs to build that infrastructure more speedily so that the rest of the business community and consumers can catch up and move that process on at an even faster clip.

Banks that have invested heavily in digital technology will reap great rewards, even as they might suffer from the decline of their lending portfolios during the challenged atmosphere of recession and declining markets.

‘Some OFW winners.’ There is a small group of winners among the OFW sectors. These are retired people on pensions who had earned their savings (pension plans from social security systems in foreign countries where they have worked; special company pension or “provident” plans; etc.) from their past employment. They receive steady remittances from these pension schemes.

In recent times, OFW remittances have been rising, in part because of the accumulation of such retirees. The steadiness of the numbers of OFW pensioners might have helped to keep the OFW remittances robust and less subject to wider fluctuations that follow market developments.

There is a caveat to this. The COVID-19 recession worldwide will reduce the number of employed workers and cause precipitous declines of current OFW remittances. The fall of OFW current earnings will have to be balanced against the steady flow of pensioned remittances.

It will not be surprising if greater imbalances and volatilities result. Moreover, pension plan investments might have suffered erosion through a decline of values in the stocks and financial markets.

‘Big long-term winners.’  There are long-term winners that are immediately apparent in the field of technology and science. As a nation, we could reap benefits from this development. As a country with a large employable labor, we could also be adversely affected.

This, however, depends on how we structure the future in harnessing and improving the nation’s capacity to adopt technological change. Future policies toward enhancing the “Fourth Industrial Revolution” was a subject of a recent commentary in this column.

Distance communication has accelerated much faster during the lockdown than at any time before. Teleconferencing has displaced office face-to-face meetings. The sudden rise of Zoom and its competitors has driven telecommunications in linking workers in the workplace in imaginative ways.

Another important development is the impact on the field of education: the importance and upcoming surge of distance learning opportunities. This development is now taking place and will accelerate more if the country’s internet and telecommunications infrastructure is expanded and supported.

Distance learning is even more important in business interactions. Those companies that have advanced teleconferencing and higher levels of communications will be able to make quicker and, perhaps, more efficient decisions to move forward their programs and plans.

These developments will affect the BPO business operations in the country which is already in an advanced stage of development. It is also under potential competition and displacement by the challenge arising from improved uses of artificial intelligence and robotics in the work place. They could potentially decimate the BPO industry in the country.

Yet, new opportunities in these fields (for which unfortunately we are not fully invested to have harnessed our labor force fully) will arise. Then, the likelihood of preparing this with a sensitized program of manpower training that is coupled with investment promotion designed to attract technology-oriented foreign investors to the country.

This, however, requires major reforms in our foreign investment attraction laws, including a more open approach toward an inflow of highly competent workforce from abroad to help in pushing such a program.

Great progress in distance learning and pushing the domestic infrastructure for the educational system is needed in the country. How to expand such an infrastructure forces us to revisit the over-all educational program, the curriculum content, and the investments in all aspects of educational investments.

***

Meralco’s digital billing system

Acrimonious complaints have been made against Meralco’s billing system. I will add one more, to the recent valid criticisms that they have received.

I was forced to go to their digital bills payment system website because my bill did not arrive. While I found my billing history, including unpaid bills, their information system did not contain the ATM reference number that gives the unique five digits that Meralco requires so that the payment matches the consumption usage for the period of billing. (Indeed, this requirement is unnecessary. My water bill and all other bills do not have such bothersome second identifying feature.)

I succeeded in paying my bill digitally through a third party payment provider only after four days were wasted waiting for their answer to my letter.

This is plain inefficiency! And yet, Meralco even charges its customers a fee to pay through their digital bills payments system. Nonsense!

By paying digitally, we make them save money. Meralco maintains an expensive huge bureaucracy in support of an antiquated bill collection system. They should be happy we are helping them make it more efficient.

My email is: gpsicat@gmail.com. For archives of previous Crossroads essays, go to: https://www.philstar.com/authors/1336383/gerardo-p-sicat. Visit this site for more information, feedback and commentary: http://econ.upd.edu.p h/gpsicat/

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