Steepest

There is good and bad news about the Omicron variant that today must be driving the steepest climb in infection rates so far.

The good news is that the variant appears more benign. The rise in hospitalization is markedly lower than the rise in infection numbers. While many times more transmissible than the deadly Delta variant, Omicron appears to have lower mortality rates.

The unvaccinated constitute the great majority of those hospitalized due to Omicron infections. This is the reason the Metro Manila mayors have focused on restricting the movement of the unvaccinated.

Also, if the situation in South Africa is any guide, the surge in infection appears to be shorter-lived. After sharply spiking, infection numbers decline after about three weeks. We will have to confirm this with the numbers in Europe and North America, where Omicron created unprecedented infection numbers.

The bad news is that this Omicron-driven wave of infections will hit more people compared to previous waves. It is also possible that a conjunction between flu and Omicron infections happen, as Israeli epidemiologists observe.

In our case, the very sharp spike in daily infections appears concentrated in the National Capital Region (NCR). This happens despite the region’s very high vaccination rate. So much for herd immunity, an imprecise concept to begin with. The new variant has such transmissibility it breaks through the defenses vaccination was supposed to have invested.

OCTA Research projects the daily infection rate will be much higher than what we saw last year as we were menaced by the Delta variant. The sharp rise in the daily attack rate and the positivity rate we saw over the past few days support this projection. In only about a week, we jumped from “very low risk” to “high risk.”

While the steep surge does suggest Omicron activity, let us not forget that the Delta variant is still very much around. Science does not know enough yet about how Delta and Omicron will interact. It is unlikely that lethality and transmissibility will combine in one super variant. What we do know is that its advantage in transmissibility makes Omicron the majority variant in a very short time in societies where it had spread.

Business sentiment does not appear too deterred by increasing evidence of Omicron community transfers. Market sentiment is buoyant and optimistic. This may be due to early evidence that the Omicron-driven surge is less lethal and possibly short-lived. The surge brings with it the gift of stronger herd immunity.

The current Omicron-driven surge bears all the hallmarks suggesting the pandemic in well on its way to becoming endemic. As more and more people are getting vaccinated, the new variant has less killing power.

Recall that the pandemic of 1918 rampaged for about two years. The flu virus that caused it became less lethal and mutated into the common virus for which vaccination is still applied to this day. There were no vaccines developed during the time this pandemic raged.

The World Health Organization confidently forecasts the pandemic will be contained this year. Should this happen, the present pandemic will roughly replicate the time line of the 1918 pandemic. This time, however, the containment has been driven by billions of inoculations.

2022 is the year our economic managers predict the country will finally move up to join the ranks of upper middle-income economies. Former president Gloria Macapagal Arroyo expressed confidence the country will achieve First World status within our lifetime on the basis of policy reforms introduced during her presidency and further reforms now in the legislative pipeline.

This should be possible if the disruption caused by the Omicron-driven surge is kept brief.

The UP Pandemic Response Team projects infections could rise to 40,000 daily new cases as the present surge peaks. That is not a terrifying number if we consider that the new variant results in fewer hospitalizations.

On the basis of present numbers, groups such as OCTA predict the peak in infections occurring at around the third week of January. That is actually good news, all things considered.

While the surge takes hold, we will just have to button down and practice enhanced discipline. The only thing that could keep this surge going is collective carelessness – such as what happened in the case of the now infamous Poblacion girl.

The wild card, as always, is the emergence of yet another variant. That will render all predictions null.

RCEP

Given all the election-related noise and pandemic-related concerns, a proper public discussion about our accession to the Regional Comprehensive Economic Partnership (RCEP) has not been undertaken.

Over the next few days, the Senate should ratify our accession to this regional arrangement or we miss the boat. Failing to join RCEP will translate into a loss of about two percentage points in our GDP growth over the next generation. That will condemn us to the position of the region’s laggard.

RCEP is a free trade agreement including the ten ASEAN countries, Japan, China, New Zealand, Australia and South Korea. These are the countries we trade most intensively with and rely on for investment flows as well as technology transfers. Should the Senate fail to ratify our accession, we will become a pariah economy in a dynamic region, pretty much resembling North Korea.

RCEP is the main vehicle for the dawning of the Asian century. Nearly all the countries mentioned above have ratified their participation.

There is every reason for us to join this free trade arrangement. It is our door to progress.