Deaths and debts

Wake me up when September comes. But then again who are we kidding? The mess isn’t likely to end by then, is it?

I am as confused as you are, suddenly waking up to the news that we are again on stricter lockdown – no domestic flights, no public transportation, no unnecessary movements.

But with only a day’s notice, the result was total chaos. Traffic in Metro Manila on Monday night went on a standstill. Commuters rushed to the bus stations and those who could afford went panic-buying.

If only we could sleep through the mess.

President Duterte heeded the call of medical workers to place Metro Manila and nearby areas back under modified enhanced community quarantine. But the sudden and abrupt implementation of this shows the sad truth – there is really no well-thought-out plan. Anything can change in a heartbeat, in the blink of an eye. It seems our leaders are writing everything on sheets of yellow pad paper, to be easily crumpled and thrown to the trash bin when another idea comes along.

Four months on and still authorities don’t really know what to do for sure.

I believe in the concept of a lockdown. It is wise and courageous but doing it the way we did in mid-March isn’t going to be very effective. We can’t plug multiple leaks with just one stopper.

Simply imposing a lockdown will not strengthen our already fragile health system as it is. Plugging the leak or, in this case, stopping the movement of people without actively strengthening our hospitals may not be as effective.

And surely, lashing out at our demoralized and COVID-19-fatigued health workers – isn’t going to help, too.

What’s the plan?

I hope we can use this “timeout” well by strengthening the health system and working on our economic recovery.

As Winston Churchill said in a speech to the House of Commons in 1944 on the progress of World War II:

“This is no time for sorrow or rejoicing. It is a time for preparation, effort and resolve. The war is still going on.”

There should be more parallel actions – increase bed capacity of the hospitals, provide more ventilators, hire more health workers and acquire more PPEs and other essentials for them.

This time, the government should really enhance capacities in testing, tracing, isolation, and treatment, aggressively recruit more health workers by offering them better pay and put up more quarantine facilities.

I also hope there would be enough ayuda, distributed at a faster pace so that those who can’t work will still be able to survive.

If the government has no new measures to take, this lockdown may not yield the intended results.

A lockdown isn’t a miracle pill. Sick people will continue to flock to the hospitals. This means that if there are no new measures to strengthen the health system during this two-week lockdown, then it might not be that effective.

I argue that with no well-thought-out plan for the health system, the lockdown will be futile and will just come at the expense of our already battered economy.

Debt crunch

An economy that will take years to recover may translate to a debt crunch for the Philippines later on. Although we are definitely not in the same situation as Argentina, which has defaulted for the nth time, or Lebanon, which embarked on its first debt restructuring, a debt crunch may be brewing here, too.

The national government’s outstanding debt has already swollen to a record P9.054 trillion as of end-June.

This is 1.8 percent higher than the end-May level of P8.890 trillion “primarily due to the net issuance and availment of domestic and external financing” to fund the government’s response to COVID-19, says the Bureau of the Treasury.

With this, the country’s debt-to-GDP ratio is expected to rise to 50 percent this year from 39 percent last year, Finance Secretary Carlos Dominguez says.

As the virus shuttered businesses, which would mean less tax collections for the government, the state has no choice but to resort to more borrowings to fund its services and respond to the pandemic. The result will be devastating – credit rating cuts, more expensive loans and higher costs of money.

For now, we have strong dollar reserves, but this will not be for long. Dollars from overseas Filipinos are dwindling and earnings from the BPO industry could dry up because of the global economic slowdown. These are the two sources of foreign exchange that have kept us afloat for some time now. We don’t really have real or significant exports of goods to replace these two major sources.

This means that as early as 2021, our balance of payments situation could be in a precarious situation.

The good news is that interest rates are low now, and so is the price of crude oil but this can change and the situation will certainly worsen. When this happens, our already fragile economy will really be all messed up. This, while the number of COVID-19 cases in the country continues to climb.

The result could be a COVID-19 inferno of deaths and debts.

Iris Gonzales’ email address is [email protected]. Follow her on Twitter @eyesgonzales. Column archives at eyesgonzales.com