COVID-19: The only thing certain is uncertainty

Martin Luther once said, “Nothing in the world causes so much misery as uncertainty.”  Centuries gone and the same assertion remained true and real. Certainly, as generations come and go, it will forever stay. In fact, in this generation, we don’t need to go far. As the coronavirus disease 2019 (COVID 19) continues to wreak havoc, uncertainties will always creep in and muddle our vision. 

To alleviate the pains brought about by it, other countries are so busy finding the vaccine.  Miserably, however, while the rest of the world is racing to findthe vaccine, in us, in Cebu City, we are so busy trying to find the 17,000 lost chickens. Consequently, our politicians, as usual, are so busy throwing mud at each other while the search for the lost chickens are ongoing.

These are the sad realities that we are seeing today. So that, we, as sensible citizens, we’d rather try to understand the situation we are currently in and what our future may bring. 

Actually, everything depends on the extent of COVID 19’s devastation and the time we need to contain it. If its devastation isn’t that spread and will be contained the soonest, the economic implication may not be that severe. Otherwise, expect that our recovery efforts will be an uphill climb.  Simply put, without the vaccine, the future is bleak.

Moreover, the uncertainty is more pronounced as we try to understand some economists’ take on the future. 

For one, as early as April 3, the Asian Development Bank (ADB) already said that “our economic growth will slow significantly this year before a strong rebound in 2021.”  It projectedthat “the Philippines’ gross domestic product (GDP) shall grow at 2.0% in 2020.”  However, it expected“a strong recovery to 6.5% GDP growth in 2021, assuming that COVID-19 infections in the country are curbed by June this year.”

Again, as emphasized, this scenario is only possible if the infections in the country shall be curbed by June this year. However, as we tore the month of April from our calendar, two credible institutions made its own projections in early May (or, in a just a month). On one hand, Fitch Ratings projected that the country’s economy will contract by 1% this year. Fitch Solutions, on the other hand, had it at 2%. 

Moreover, Fitch Ratings said that “the 2020 forecast is uncertain and subject to considerable downside risks depending on how the virus runs its course globally and domestically and the possibility of a further extension or re-imposition of lockdown measures.”  It further said that “the pace of newly reported cases shows signs of flattening, but the virus nevertheless continues to spread, and partial lockdown measures that were introduced in mid-March have been extended through at least May 15.”Clearly, therefore, contraction could even be worse aslockdowns are extended in some highly urbanized cities. 

This month, June, 2020 (or in just two months from its earlier projections), the ADB corrected itself. While it still believed that our economy shall have a big rebound in 2021 (still the same at 6.5%), it projected that our economy’s growth shall be a negative 3.8% this year.

These figures and the pace by which projections are changed clearly demonstrate the volatility of the current situation and the uncertainty of the future. Considered as a black swan to many, we have to be reminded that this coronavirus is affecting the economies all over the world.In fact, as we now all realized, health is not just our concern but our livelihood as well. 

With these experiences, lessons are learned and the fear of the unknown obtains.  Consequently, with the extent of the financial aftershock still unknown, loan defaults for businesses (not health-care and food related) will surely rise. 

Therefore, with non-essential businesses slowing down, do not expect much consumption from them. More so with pure wage-earners (who used to swipe their credit cards with relative ease) who will berendered jobless, they will also be card-less by then. In fact, with so much uncertainties, even those with stable jobs will limit purchases and save more to prepare for another wave. Consequently, demands for products and services will be scarce. 

Clearly, therefore, the only thing certain, at this point in time, is uncertainty.