Postpone Christmas

DEMAND AND SUPPLY - Boo Chanco (The Philippine Star) - November 27, 2020 - 12:00am

There is a lot of good news about very effective COVID-19 vaccines. Pfizer, Moderna, and Oxford-AstraZeneca all report excellent safety and efficacy for their vaccines.

But we still can’t relax or even plan to celebrate Christmas this year with big family reunions. Indeed, the Americans sort of postponed Thanksgiving this week because of an alarming rise in new cases. Where my daughter lives in Southern California, they are on lockdown again and even cancelled all flights.

We are doing better than them. Edson Guido of ABS-CBN News Analytics has reported a daily positivity rate of below five percent  for the first time since June 2 (4.7 percent on  Nov 22). Edson also noted a 5.6 percent positivity rate for the past two weeks (Nov. 9 to 22) and 5.9 percent positivity rate for the month of November so far.

The World Health Organization benchmark is five percent or lower for two weeks. “This is good news! However, now is NOT the time to be complacent!”

For one thing, no vaccine is going to get here earlier than middle of next year, if we are lucky. Remember DOH failed to reserve, and as President Duterte puts it, the rich countries will take care of their own people first.

So, like everything else since March, we will have to postpone Christmas. At best, our family reunions and parties with friends will be via Zoom.

There is no safe social distance indoors. So long as the virus is actively infecting people and you can’t avoid face to face meetings, practice Safe Six… stay at least six feet away from everybody… further is better.

Aerosols. That’s a word we must remember. That’s how the COVID-19 virus spreads. Even with family members, specially those not living with us, it is best to open windows… or entertain outdoors.

But with friends and co-workers, avoid any personal contact for Christmas parties. If you are working from home all this time, how can you justify having face-to-face Christmas parties?

It is a waste of time to write Santa a letter. Santa won’t be allowed to enter the country even if he is coming from a COVID-free North Pole. Our officials still aren’t inclined to allow foreign visitors in, unlike other countries that allow visitors from COVID-free countries.

We are also slow to allow the use of more convenient tests like the Japanese saliva test (which is also PCR) that is now used in Japan and Hong Kong for visitors. It is cheaper, doesn’t require technicians to get specimens for testing, and you can also get faster results.

We have written off our local tourism industry. That’s a pity because that impacts badly on employment at the grassroots, as well as trade in farm goods that could help bring back color to our badly wounded economy.

Fitch Solutions, in a release a few weeks ago before the typhoons, noted that our economy faces a challenging recovery.

“We at Fitch Solutions believe the Philippine economy will struggle to maintain its recovery momentum in Q4 2020 as domestic containment measures weigh on activity and demand.”

Fitch projects that our economy may return to pre-pandemic levels by mid-2022… a year and a half away. We may have to postpone next year’s Christmas too. Fitch thinks our economy will contract 9.6 percent  in 2020, revised lower from 9.1 percent, before rebounding to 7.6 percent in 2021.

Our consumer driven economy has yet to recover from the pandemic lockdowns. Despite footfall improving to 30 percent of pre-COVID-19 levels, recovery has been slow. Public fear of contracting the virus has not abated since Q2 2020, a stock market analyst observed.

Fitch noted that as of end-October, the Philippines ranked higher than Indonesia, Malaysia, Thailand and Vietnam on the Oxford University Stringency Index, reflecting tighter pandemic-related restrictions. This will delay economic recovery, Fitch says, as investment decisions are postponed and household savings rates remain elevated.

Fitch noted that Google mobility data shows only modest improvements in retail and recreation, and grocery and pharmacy footfall in October relative to September. As of Nov. 3, retail and recreational activity stood 42 percent below pre-pandemic activity levels, while grocery and pharmacy stood 16 percent below.

“Consumer sentiment for the next three months also indicates a sharp decline in Q3 2020 relative Q1 2020 (the survey was not taken in Q2 2020). The subdued outlook dims our view on a strong service sector recovery, which accounts for around 62 percent of output.”

A big part of this service sector is tourism, representing about 12 percent of our GDP. Because of the inability of national and local governments to weigh benefits vs risks, we are wasting opportunities for recovery. Only Bohol seems to be more calculating in reopening the tourism industry.

As one industry stakeholder puts it: “A large portion of the country’s tourism sector are doomed to almost certain bankruptcy in the course of 2021.”

March 31 is the common date for annual renewal of hotel-travel agent contracts. Prices and packages for the next 12 months are negotiated. Based on those agreements, the travel agencies make their own sales programs, brochures, etc.

These arrangements account for the bulk of the country’s international tourism receipts, as much as over 80 percent of international revenues.

“If international tourist air travel from at least Korea and Japan is not restored (with minimal restrictions and certifications) by say January 2021 at the latest, the foreign agencies will just write us off for the next 12 months and won’t consider the Philippines again until maybe January 2022.”

Come to think of it… the budget of the tourism department next year is less than P4 billion. The Christmas bonus of the PNP alone is over P8 billion. Saving the industry simply isn’t a priority. Long awaited government assistance to tourism establishments isn’t coming soon enough to save jobs.

They have been playing Christmas carols in our largely empty malls, perhaps hoping to get us to start shopping again. But the Grinch stole our Christmas this year. So, there goes the economy.

At this point, it is not a simplistic health vs economy. The challenge is how to get the balance just right. Zoom and FaceTime is as good as it will be for Christmas this year – and possibly for next year as well.

Boo Chanco’s e-mail address is bchanco@gmail.com. Follow him on Twitter @boochanco

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